Anyone thinking or hoping for something definitive from Bernanke about what the Fed will announce in two weeks at their next FOMC meeting didn’t get any specifics. The tone though of his speech was very subdued on the economy and benign on inflation. He also highlighted the risks to the economy from Europe and the US fiscal issues coming to head at year end. He concluded by repeating what was said in the June FOMC statement that they are “prepared to take further action as appropriate…” Bottom line, on the question of whether the Fed is close to acting again at the next meeting, it’s unanswered today as Bernanke may want to wait until the two day meeting before he firmly decides. If for whatever reason they don’t do more, assuming the downturn in stocks that will follow in conjunction with further economic weakness will just lead to another Jackson Hole focused speech that will see QE in Sept instead. Either way, while Ben didn’t tip his hand, we know what’s in the cards.
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