Shift

My conclusion from Ben Bernanke's recent speech and Q&A is that he thinks the recovery has become self sustained. I have mainly two reasons to believe that:

> He strongly suggested the US should pay attention to its fiscal situation in the near future. This means fiscal tightening and Mr. Bernanke would not suggest it so strongly if he did not believe in a continuing, self-sustained recovery.

> He made the point that GDP has started growing above the 2.5 % level, a fact that is expected to be positive for the employment rate.

This is a shift in expectations that was not previously evident.

Here is the link to speech and Q&A. Unfortunately, embedding the video resulted in some errors.

What does this mean for the markets?

I think this is going to negatively influence the stock market over the intermediate term. It will also be bullish for the dollar in the same time frame.