Salient to Investors:

Caroline Baum writes:

  • The Wall Street Journal’s Jon Hilsenrath is widely viewed as Bernanke’s unofficial spokesman.
  • Bernanke was crystal clear when he communicated the Fed’s objectives.
  • The rise in interest rates can be easily overwhelmed by better earnings as a result of stronger growth, so if the Fed’s optimistic outlook is correct, stocks should make a complete recovery.
  • Expectations about the overnight rate are the key determinant in setting long-term bond rates.
  • If the Fed really plans to wait for full employment before it starts to lift the funds rate, then Bernanke will need a lot more than clarity to prevent the outcome from being an unmitigated disaster.

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