Bernanke’s speech at Jackson Hole is far from an all clear for the financial markets. He is encouraged by the decline in commodity prices and the rise in the dollar, saying they will help moderate inflation going forward but the inflation outlook remains highly uncertain. The financial storm has not subsided, he said and growth will fall short of potential “for some time”.
There are not a lot of clues here on future rate moves as the speech lays out the case that financial tubulence is ongoing and inflation remains a concern. Stocks are holding up while the dollar is a shade weaker as no all-clear was sounded.