Most important speech of Bernanke’s life
TEXT OF STORY
Doug Krizner: Today, Fed chairman Ben Bernanke faces a crucial test of his ability to manage the credit crunch. He’ll give a speech in Jackson Hole, Wyoming, of all places, and some are calling it the most important speech of his career. Amy Scott reports.
Amy Scott: Every year central bankers and leading economists descend on resort town Jackson Hole in late summer.
Adam Lerrick: They do some hiking, they do some white water rafting, but Jackson Hole has become over the years a central venue.
That’s Adam Lerrick. He teaches economics at Carnegie Mellon. This year, he says investors will be watching for any that the Fed might cut interest rates to relieve the recent credit crunch.
James Paulsen is chief investment strategist with Wells Capital Management. He says if the market knows ahead of time that the Fed is gonna cut interest rates, it barely budges when the news breaks.
That’s why he doesn’t expect Ben Bernanke to tip the Fed’s hand in today’s speech.
James Paulsen: If it does make a move, it wants to change people’s thoughts and culture. One of the ways you can do that is with shock treatment.
Plenty of Wall Street players would love an interest cut, because cheaper borrowing costs help boost stock prices. But the cautious point out that cheap, easy money is what got us into this whole credit mess in the first place.
I’m Amy Scott for Marketplace.
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