Bernanke: More Stimulus ‘on the Table’<http://www.bloomberg.com/news/2011-11-02/bernanke-says-more-stimulus-on-the-table-as-risks-to-u-s-economy-remain.html>Additional stimulus “remains on the table,” Bernanke said today at a press conference in Washington <http://topics.bloomberg.com/washington/>, declining to specify conditions that would prompt a move. “While we still expect that economic activity and labor market conditions will improve gradually over time, the pace of progress is likely to be frustratingly slow.”
U.S. stocks rebounded from a two-day slump, the dollar fell and Treasuries pared losses after Bernanke’s comments. The Standard & Poor’s 500 Index climbed 1.6 percent to 1,237.90 at the close of trading in New York <http://topics.bloomberg.com/new-york/>. The Dollar Index slipped 0.2 percent, trimming an earlier drop of 0.7 percent. Treasury 10-year yields were unchanged at 1.99 percent, after jumping nine basis points earlier. Sixty-nine percent of economists in a Bloomberg News survey expect the Fed to embark on a third round of bond buying, with a plurality of 36 percent of respondents seeing purchases beginning in the first quarter of 2012, according to an Oct. 26- 31 survey of 42 economists. Policy makers voted in September to swap $400 billion of short-term debt in the Fed portfolio for longer-term securities to reduce interest rates in a strategy dubbed Operation Twist. They said they would reinvest proceeds from maturing housing debt into mortgage-backed securities, switching from Treasuries.
