Yesterday Fed Chairman Bernanke testified before the Senate that he believed the economy to be strong and that there should be slow to moderate growth for the year. He also indicated that inflation was no longer an issue, and the Fed would not be raising rates in the near future. Wednesday's stock market rallied on this news, and the DOW rose to a new high.
Today during his second day of testimony before congress, Bernenke seems to have become a bit more guarded. He saw a strong economy, but with inflation still being the major obstacle. Bernanke warned that the Fed was still on guard and ready to battle any signs of inflation with higher interest rates. Again, the markets reacted to Chairman Bernanke's more nuanced statements.
Congressman Barney Frank seemed to sum up the Chairman's testimony when he told Bernanke, "It seems a little odd to say 'here's what I think, but it might also be worse than I think."
This week interest rates dribbled down again for 30 year fixed mortgages.
