According to PIMCO’s El-ERian he delivered a careful and
balanced view of the economy (a gradual healing in the context of a still-muted
outlook growth and jobs), re-iterated the improved banking and financial
conditions at home (stressing the major additions to bank capital), and
referred to the strains in Europe (acknowledging that they act as a drag on the
US economy). The most interesting aspect
related to policy. Specifically:
1. Certainly in his written submission, but also in the oral
responses to questions, Bernanke is trying hard to shift the focus from
monetary policy to other areas (particularly fiscal). This speaks to his lack
of specificity on future monetary policy actions and to his comment that he
would feel much more comfortable if Congress were to take some of the policy
burden off the Fed.
2. If this interpretation is correct, Bernanke is following
the example of Mario Draghi, the president of European Central Bank . Draghi has been unusually vocal in recent
weeks about the need for politicians in Europe to step up to the plate and
deliver on their policy responsibilities; and he has been clear about the risk
that relying just on the ECB may, in my words, again end up providing a bridge
to nowhere…….
Wait, wait…there’s more at http://www.cnbc.com/id/47722809
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