July 17 - Stocks were calm after Fed Chairman Ben Bernanke said while the central bank would taper its bond buying program this year- the plan was not set in stone. Bobbi Rebell reports.
The third time is a charm for Fed Chairman Ben Bernanke. Markets remained steady as he testified to Congress - saying while nothing is set in stone, the Fed will taper when the key conditions are met. But those conditions have not yet been met: SOUNDBITE: BEN BERNANKE, CHAIRMAN, U.S. FEDERAL RESERVE (ENGLISH) SAYING: "The economy is weak, inflation rates are low- if we were to tighten policy the economy would tank." In what many believe to be his last semi-annual testimony Bernanke was also critical of Congress and its fiscal policies: SOUNDBITE: BEN BERNANKE, CHAIRMAN, U.S. FEDERAL RESERVE (ENGLISH) SAYING: "I think that fiscal policy is focusing a bit too much on the short run and not enough on the long run. The near term policies, which include not only the sequester but the tax increases and other measures, according to the CBO, are cutting about a percentage point and a half, about one point five percentage, from growth in 2013. That would mean instead of 2 percent growth we might be enjoying 3 and a half percent growth." A lot of the focus was on the strengthening housing market- and the impact of higher rates: Economist Greg Daco of IHS Global Insight: SOUNDBITE: GREG DACO, U.S. ECONOMIST, IHS GLOBAL INSIGHT (ENGLISH) SAYING: "That sector has been booming, has been a big plus for the U.S. economy, and unexpected and prolonged increases in interest rates could damage the housing recovery. So I think that what Ben Bernanke was trying to say is that they are monitoring these recent increases in interest rates but so far they are not a concern. If these rates were to last longer I believe the Fed would act upon it." Bernanke also defended his communication policy: SOUNDBITE: BEN BERNANKE, CHAIRMAN, U.S. FEDERAL RESERVE (ENGLISH) SAYING: "I continue to believe that we should do everything we can to apprise the markets and the public about our plans and how we expect to move forward with monetary policy. I think not speaking about these issues would have risked a dislocation, a moving of market expectations away from the expectations of the committee. It would have risked increased build up of leverage or excessively risky positions in the market, which I believe the unwinding of that is part of the reason for some of the volatility that we have seen." Bernanke testifies on Thursday to the Senate Banking committee.