Bernanke catches up with rest of country
The U.S. economy has been a disaster for the better part of the past six months. If you listened to speeches by Ben Bernanke during that period you would have never heard the acknowledgement that the U.S. economy is in a recession.
This finally happend today! The Fed has cut the Fed Funds rate a full two pecent since the beginning of the year. Congress has issued rebate checks in the amount of one hundred and fifty billion dollars, but there has never been an acknowledngement that the U.S. economy was in a recession. The fact that the economy lost jobs in the month of February and one of the largest investment banks in the world Bear Stearns was facing near bankrupcy was a sure sign that things were not well on wall street. U.S. home values have decreased by over 10% over the past twelve months.
Bernanke’s testimony is curious as the stock market staged one of the largest rallies in U.S. history rising by almost 400 pts to start the second quarter of trading. Many investors believe that the worst of the credit crisis is now over and the U.S. economy, while certainly in a period of recession should begin to show signs of life by the third or fourth quarter of this year. The Fed chairman has been active in working to bring the economy out of it’s down turn, no matter how he wanted to phrase this in the past.