Friday, March 8, 2013
Ben Bernanke Is Greatest Market Mover of Them All
This article just shocks me when I know that "markets move more when Federal Reserve Chairman Ben Bernanke opens his mouth than they do when any other Fed official speaks." Do you agree with the author? Do you think Ben Bernanke deserve to be the greatest market mover?
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Using historical analysis as a framework, I would have to agree with this wholeheartedly. Even in this past week, his omni-policy approach of quantitative easing is the main reason the markets had a record week. (The DOW specifically). As one of the most powerful figures in our economic policy--his decisions are certainly of serious importance rippling on out into every market sector.
ReplyDeleteChairman Ben Bernanke is the head of the FED. People see him as the face of the FED, thus all the attention is on him. If you were to ask random Americans who was the head of the FED, I would hope most could answer correctly. On the other hand, I bet very few people know the names of any of the other leaders at the Federal Reserve. Bernanke is definitely a market-mover. Though the article mentioned Dennis Lockhart did move interest rates 17 basis points, his name is not nearly as recognizable. As consumer confidence plays a determining role in demand, what the FED says plays a large role in aggregate demand. For many Americans looking to hear about the economy, they are trusting Bernanke to give them the best information.
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