Ben

BERNANKE: "VISS" YTTERLIGARE ÅTSTRAMNING KAN BEHÖVAS

(Tillägg: Fjärde stycket)
STOCKHOLM (Direkt) Federal Reserves penningpolitiska
kommitté, Fomc, konstaterade i januari att en viss ytterligare
åtstramning av penningpolitiken kan komma att behövas.
"Det är en bedömning som jag instämmer i"
Det sade Fedchefen Ben Bernanke inför representanthusets
finanskommitté på onsdagen.
Han sade att den senaste tidens inkommande data tyder på
att den ekonomiska expansionen ligger kvar på spåret.
Inflationstrycket ökade 2005 men kärninflationen, knappt under
2 procent förblev ändå måttlig och de långsiktiga
inflationsförväntningarna verkar ha förblivit tyglade.
Ben Bernanke pekade på att riskerna för att höga
energipriser kan slå igenom på andra delar av ekonomin kan
vara högre än vad som nu antas. Energipriserna kan också få en
ihållande effekt på inflationsförväntningarna.
"En annan faktor som har betydelse för
inflationsutsikterna är att ekonomin nu tycks verka med ett
relativt högt resursutnyttjande", sade han.
Ben Bernanke påpekade att det är svårt att utvärdera vad
som är ekonomins uthålliga tillväxtpotential. Federal Reserve
kommer därför att hålla ett vakande öga på alla relevanta data
och vara flexibel i bedömningarna.
"Icke desto mindre finns det en risk att, med en
aggregerad efterfrågan som uppvisar ett betydande momentum,
tillväxten kan överstiga sin uthålliga bana vilket i slutänden
- i frånvaro av motverkande penningpolitiska åtgärder - kan
leda till uppåttryck på inflationen", sade han.
Ben Bernanke sade vidare att inte alla risker mot
ekonomin berör inflationen. Ett antal indikatorer pekar
exempelvis på en inbromsning på husmarknaden.
"En viss nedkylning på husmarknaden kan väntas och
skulle inte motsäga en fortsatt solid tillväxt i den
ekonomiska aktiviteten överlag. Men givet den avsevärda
uppgången i huspriserna och den höga nivån på nybyggandet
under de senaste åren kan priserna och byggandet bromsa in
snabbare än vad som nu verkar troligt", sade Ben Bernanke.
En svagare tillväxt i egnahemsförmögenheterna kan i så
fall innebära att hushållen ökar sitt sparande och minskar
konsumtionen mer än väntat.
Sannolikheten för ytterligare stora ökningar i
energipriserna utgör en ytterligare risk mot ekonomin.
"Förutom att höja inflationen kan en sådan uppgång skada
konsumentförtroendet, och därmed dämpa konsumtionen av icke
energirelaterade varor och tjänster", sade Ben Bernanke.
Men även om det finns betydande osäkerheter runt
utsikterna bedömer Ben Bernanke att Federal Reserve har kommit
långt i fråga om att dra ned på den expansiva
penningpolitiken.
"Som en konsekvens av detta kommer Fomc under de
kommande kvartalen att behöva göra löpande, provisoriska
bedömningar om riskerna mot både inflationen och tillväxten,
och de penningpolitiska besluten kommer att i ökande grad bli
beroende på inkommande data", sade han./PD-MW
#CODES T/CEN T/MACRO

Inlägget är redigerat av författaren.

Fed's Bernanke: Agrees Some Rate Hikes May Be Needed
By Brian Blackstone and Elizabeth Price

Of DOW JONES NEWSWIRES


WASHINGTON -(Dow Jones)- Federal Reserve Chairman Ben Bernanke said Wednesday
that while "substantial progress" has been made in removing policy
accommodation, robust demand could lead to upward price pressures.

Bernanke was upbeat about the prospects for the U.S. economy, telling members
of the House Financial Services Committee that the latest employment and
consumer spending data "suggests that the economic expansion remains on track."

While "the news has been good" that long-term inflation expectations appear
"well anchored," Bernanke warned in prepared testimony that "with aggregate
demand exhibiting considerable momentum, output could overshoot its sustainable
path, leading ultimately - in the absence of countervailing monetary policy
action - to further upward pressure on inflation."

The semiannual testimony, formerly known as Humphrey Hawkins, is closely
watched not only because it's Bernanke's first public comments on monetary
policy since becoming chairman on Feb. 1, but also because the testimony
represents the consensus view of the entire Federal Open Market Committee and
not an individual member.

The testimony includes the Fed's central tendency forecasts for the U.S. The
Fed expects gross domestic product to expand "about" 3.5% this year, which is
the high end of the Fed's previous range of 3.25% to 3.5%. It sees GDP growth
of 3% to 3.5% next year.

The central bank projects underlying inflation, measured by the core personal
consumption expenditures price index, to be about 2% this year, which is
considered the high end of the Fed's comfort range. The Fed expects inflation
in 2007 to come in between 1.75% and 2%.

The Fed has raised rates 14 straight times since mid-2004 to 4.5%. Wall
Street expects another quarter-point hike at Bernanke's first FOMC meeting
March 27-28. Forecasts are split beyond that as to whether the Fed holds at
4.75% or goes to 5% or higher.

As it stands, the FOMC's latest statement on policy Jan. 31 - one day before
Bernanke became Chairman - was "some further policy firming may be needed."
That's considerably softer than its previous assertion in December that "some
further measured policy firming is likely to be needed."

Bernanke called that assessment one "with which I concur."

The FOMC's language change, analysts said, gave Bernanke added flexibility
and suggested that policy, as Bernanke said Wednesday, "will be increasingly
dependent on incoming data." The Fed will have six weeks more worth of data to
digest before its next meeting.

Recent economic data have tilted toward the Fed needing to be more
aggressive. The January unemployment rate fell to a nearly five-year low of
4.7%, and a 2.3% rise in retail sales last month suggest gross domestic product
could grow in excess of 5% this quarter, well above the economy's 3.25% to 3.5%
noninflationary speed limit.

The January FOMC statement also said "possible increases in resource
utilization as well as elevated energy prices have the potential to add to
inflation pressures."

Bernanke reiterated that point Wednesday, saying "the economy now appears to
be operating at a relatively high level of resource utilization."

Yet, "not all of the risks to the economy concern inflation," Bernanke added,
citing downside risks from housing and energy prices.

Though Bernanke expects a "leveling out or a modest softening" in housing, he
noted that "significant uncertainty" surrounds the outlook, so the Fed "will
continue to monitor this sector closely." Slower growth in home equity,
Bernanke said, might lead to a sharper rise in personal spending, and steeper
consumption decline, than currently anticipated.

Higher energy prices, meanwhile, could damp consumption of non-energy goods
and services, he said.

Last year's personal saving rate was at its lowest level in decades, and
Bernanke said he expects saving to "rise somewhat from its recent low level."

Bernanke appeared upbeat that higher levels of business investment should
offset any softening in housing, noting that "favorable conditions in the
business sector as a whole should encourage continued expansion of capital
investment."

Bernanke also commented in his prepared testimony on the fact that long-term
interest rates hardly budged last year despite higher official short-term
rates. Bernanke credited "far forward components" such as low inflation
expectations and an excess of global saving versus investment.

On the outlook for the global economy, Bernanke said worldwide growth "seems
to be on a good track," citing "solid" expansions in Canada and Mexico, signs
that Japan "could be emerging from its protracted slump," better conditions in
Europe and a "vigorous" Chinese economy.

Bernanke pledged to "maintain continuity" with the policy approach of former
Fed Chairman Alan Greenspan, whose Humphrey Hawkins testimonies over his
18-year tenure approached legend status.

The new Fed chief had high praise for his predecessor, referring to the
"highly successful leadership" of Greenspan.

-By Brian Blackstone and Elizabeth Price; Dow Jones Newswires; 202-828-3397;
brian.blackstone@dowjones.com and elizabeth.price@dowjones.com


(END) Dow Jones Newswires

02-15-06 1024ET

Copyright (c) 2006 Dow Jones & Company, Inc.

10:24 021506

BERNANKE: INVERTERAD AVKASTNINGSKURVA EJ TECKEN PÅ INBROMSNING

STOCKHOLM (Direkt) Den senaste tidens invertering i
avkastningskurvan i USA, där den tvååriga obligationsräntan
har noterats högre än de tioåriga, är inte ett tecken på en
inbromsning i ekonomin.
Det sade Fedchefen Ben Bernanke inför representanthusets
finanskommitté på onsdagen, enligt AFX News.
"Historiskt har det funnits en viss koppling mellan en
inversion i avkastningskurvan och en efterföljande inbromsning
i ekonomin. Men vid denna punkt signalerar inte den
inverterade avkastningskurvan någon inbromsning", sade han.
Ben Bernanke sade att inverterade avkastningskurvor
tidigare har förknippats med höga räntenivåer, i såväl långa
som korta löptider, som verkade dämpande för ekonomin. För
närvarande är dock räntenivåerna låga och utgör ingen
begränsning för fortsatt ekonomisk tillväxt.
Han sade vidare att låga långräntor inte begränsar
Federal Reserves möjligheter att bekämpa inflation./PD

Fed Bernanke: Current Acct Gap 'Can And Should Come Down'
WASHINGTON -(Dow Jones)- The U.S. current account deficit "can and should
come down," Federal Reserve Chairman Ben Bernanke said Wednesday.

Responding to questions during his semiannual monetary policy report to a
House of Representatives committee, Bernanke said he hopes that the record-high
current account deficit will "come down in a way that I hope will not be
disruptive."

Many economists are concerned that the rapid accumulation of debt as a result
of the higher current account deficit could put pressure on the dollar and lead
to higher interest rates. 

MARKET SNAPSHOT: U.S. Stocks Turn Higher On Bernanke Testimony


By Mark Cotton


NEW YORK (MarketWatch) - U.S. stocks turned higher Wednesday as investors
breathed a sigh of relief that Fed chief Ben Bernanke's congressional testimony
was not more hawkish on inflation and interest rates.


The Dow Jones Industrial Average (DJI) was last up 38 points at 11,066.


The Nasdaq Composite Index (RIXF) rose 15 points at 2,276 while the S&P 500
Index (SPX) rose 5 points to 1,280.


Bernanke told Congress more rate hikes "may" be needed as the threat of
higher inflation persists.


"Bernanke really hasn't said anything that has come as a surprise to anybody
thus far," said Michael Malone, trading analyst at SG Cowen.


Bernanke said higher energy prices could still spill over into wider price
inflation while the risk remains that "output could overshoot," putting further
upward pressure on prices.


In these circumstances, the FOMC judged that some further firming of monetary
policy may be necessary, an assessment with which I concur," Bernanke said in
remarks prepared for delivery to the House Financial Services panel.


The Federal Open Market Committee, the Fed's interest-rate setting body, has
raised its short term-rate 14 times in a row to 4.5% in a bid to slow economic
growth and choke off inflation.


On the broader market for equities, advancers outpaced decliners by more than
2 to 1 on the New York Stock Exchange, and led by a similar margin on the
Nasdaq.


On the data front, the latest report on the health of the nation's
manufacturing sector was something of a double-edged sword for investors.


Manufacturing activity in the New York area held steady in February, the New
York Federal Reserve Bank. The bank's Empire State Manufacturing index inched
higher to 20.3 in February from 20.1 in January. The increase was unexpected.
However, the prices paid index, a key measure of inflation, rose to 52.8 in
February from 46.6 in the previous month.


Also, U.S. industrial output fell 0.2% in January while capacity utilization
soared to 80.9%, the Federal Reserve said.


The January decline was led by a record 10.1% drop in utilities' output,
reflecting unseasonably warm winter weather.


The dollar fell further as the Fed chief made clear more rate hikes may be in
the offing.


Earlier the greenback was under pressure after the Treasury Department
reported a decline in capital flows into the United States in December. The
drop was led by a drop in in private investors' purchases of Treasury bonds and
notes.


The euro rose 0.3% to $1.1948. Against the Japanese yen, the greenback fell
0.7% to 116.81.


Reaction on the bond market to the capital flows data was muted as
fixed-income traders remained on hold ahead of Bernanke's speech.


The benchmark 10-year note was up 4/32 at 99 8/32, with its yield at 4.59%.


Gold futures dropped as investors continued to lock in gains after a sharp
run-up in the price of the precious metal over the last six months. Gold for
April delivery was last down $3.70 at $545.20 an ounce.


Crude futures edged higher, but remained under $60 a barrel as traders await
weekly supply data that are expected to show the nation amply supplied with oil
and its products.


The benchmark March contract was last up 28 cents at $59.90 in New York
trading.


Merrill Lynch (MER) said Wednesday it has agreed to merge its investment
management business with BlackRock Inc. (BLK) in a deal that will create a firm
with nearly $1 trillion in assets under management.


Merrill will hold a 49.8% stake and a 45% voting interest in the company that
will operate under the BlackRock name. Merrill shares rose 22 cents to $75.38
while BlackRock's stock surged 8% to $157.70.


Shares in Blue Coat Systems Inc. (BCSI) tumbled more than 18% to $19.89 after
the maker of network-security products forecast results for the current quarter
that are well below analysts' estimates.


Abercrombie & Fitch Co. (ANF) fell 86 cents to $67.96 after the fashion
retailer told investors that earnings expectations for the year were overblown.
The warning came as the New Albany, Ohio-based company posted a 58% rise in
fourth-quarter profit.


(END) Dow Jones Newswires

02-15-06 1115ET

Copyright (c) 2006 Dow Jones & Company, Inc.

11:15 021506

Bernanke: Inflation Effect Of Foreign Dollar Holdings Modest
WASHINGTON -(Dow Jones)- Federal Reserve Chairman Ben Bernanke on Wednesday
played down the potential effect that foreign holdings of U.S. dollar assets
could have on domestic inflation.

Analysts say foreign dollar holdings - which have grown markedly due in part
to greater holdings by Asian central banks - have been one factor in keeping
down long-term market interest rates, thus supporting interest-rate-sensitive
sectors of the economy despite higher official interest rates.

When it comes to overall prices, though, "I think the effect on inflation of
dollars held overseas is modest if not negligible," Bernanke said in response
to a question during his semiannual appearance before the House Financial
Services Committee.

He also said that free trade has helped moderate inflation because of added
competition and because a strong dollar has reduced import prices.

Bernanke: House GSE Bill Too Weak On Portfolio Limits
WASHINGTON -(Dow Jones)- A House of Representatives bill to strengthen
oversight of the mortgage finance companies Fannie Mae and Freddie Mac is too
weak and to accept it would be a "missed opportunity" to address problems with
the companies, Federal Reserve Board Chairman Ben Bernanke said Wednesday

"I think we have an opportunity now to address important concerns about GSEs
(government sponsored enterprises) and their effects on financial stability,"
Bernanke said in testimony before the House Financial Services Committee.

"I understand the good intentions underlying the House bill but I feel it
does not solve the problems and therefore if we were to go with that bill we
would be missing the last opportunity we will have in many years to really
address these problems."

In particular, the legislation approved by House Financial Services
Committee, doesn't go as far as the Senate version of the bill on giving
regulators power in setting capital requirements, Bernanke said. Secondly, the
House bill isn't precise on when receivership would be invoked, he added.

Bernanke said most importantly, it doesn't provide sufficiently strong
guidance for the regulators to limit the size of GSE investment portfolios to a
level required by their housing market mission.

"The GSE portfolios are much larger than anything that could be justified by
their mission and these large portfolios represent a threat to financial
stability if the taxpayer were to be called upon assist," he said.

Bernanke: Must Take Monetary Policy Lags Into Account
WASHINGTON -(Dow Jones)- Federal Reserve Chairman Ben Bernanke said Wednesday
that the central bank must take the lagged effect of previous policy changes
into account when it gauges the economic and inflation outlook.

Bernanke made the remark on lags in response to questions from the House
Financial Services Committee during his semiannual testimony on monetary
policy.

The Fed has increased rates 14 straight times since mid-2004 to 4.5%. It's
generally expected to raise rates again when it meets March 27-28, which will
be Bernanke's first meeting as Fed chairman.

"We have to think about how the economy is likely to evolve over the next
year or two. We do care about both inflation and inflation expectations," he
said.

Bernanke: 'Completely Subscribes' To Fed Dual Mandate
WASHINGTON -(Dow Jones)- Federal Reserve Chairman Ben Bernanke said Wednesday
he won't lobby for a change in the Fed's mandate from price stability and
maximum employment to numeric inflation targeting.

Bernnake is in favor of using numeric inflation targets to improve the
clarity and transparency of monetary policy.

Asked during his appearance before the House Financial Services Committee
whether he'd lobby to change the Fed's mandate, Bernanke responded, "I
completely subscribe to the dual mandate of minimum inflation and maximum
employment."

Bernanke said his recommendations regarding inflation targeting were "small
and incremental" changes that would merely make it easier for the Fed to
accomplish its mandate for maximum employment and low inflation.

THE FED: Bernanke: More Rate Hikes 'may' Be Needed


By Greg Robb


WASHINGTON (Dow Jones) -- The nation's economy is on firm footing and some
additional interest-rate hikes "may" be necessary as the threat of higher
inflation persists despite a year and a half of steady tightening, Federal
Reserve chief Ben Bernanke said Wednesday.


Higher energy prices could still spill over into wider price inflation, the
new Fed chief said.


And there's a risk that "output could overshoot," putting further upward
pressure on prices.


"In these circumstances, the FOMC judged that some further firming of
monetary policy may be necessary, an assessment with which I concur," Bernanke
said in remarks prepared for delivery to the House Financial Services panel.


There had been a fear in financial markets that Bernanke would signal a need
for a lot more in the way of rate hikes.


Analysts said financial markets breathed a sigh of relief that his testimony
stuck close to the script of the Federal Open Market Committee's last
monetary-policy statement released late last month.


"Bernanke simply stated he concurred with the recent FOMC statement that
further tightening may be necessarily but that decisions would be data
dependent," said Stephan Gallagher, economic research director at Societe
Generale CIB.


"He tried as best as possible to stick to the Fed script and to avoid making
waves," said Steve Stanley, economist at RBS Greenwich Capital.


Stocks were mixed after Bernanke's testimony was released. Stocks enjoyed a
big rally on Tuesday, and it was hard for the market to move higher.


Bonds clung to gains as Bernanke did not surprise with a hawkish tone.


In his prepared remarks, Bernanke stressed that not all the risks are on the
upside.


A sharp drop in home prices and construction this year could force consumers
to rein in their spending.


But Bernanke said this was not the likely scenario.


"At this point, a leveling out or a modest softening of housing activity
seems more likely that a sharp contraction," Bernanke said, offering the caveat
that "significant uncertainty" remains.


"In any case, the Federal Reserve will continue to monitor this sector
closely," Bernanke said.


Bernanke said there were already some "straws in the wind" that the housing
market was cooling. However, some cooling wouldn't damage the expansion, he
added.


The FOMC forecast real growth in U.S. gross domestic product of 3.5% in 2006
and for core PCE to rise 2%.


The inflation forecast is at the top of the Fed's "comfort zone," economists
said, and many said the forecast and Bernanke's testimony were consistent with
implementation of additional rates hikes in March and May, thereby bringing the
federal funds target rate up to 5%.


Bernanke's testimony "leaves the door open for some further data-dependent
interest-rate increases," said John Ryding, chief U.S. economist at Bear
Stearns.


"We see the funds rate rising to 5% by the May 10 FOMC meeting and we see an
increasing risk of a 5.25% fed fund rate by the middle of the year," Ryding
said.


Bernanke was upbeat about the economy, despite the weak 1.1% growth rate in
the fourth quarter.


"The most recent evidence -- including indicators of production, the flow of
new orders to businesses, weekly data on initial claims for unemployment
insurance, and the payroll employment and retail sales figures for January --
suggests that the economic expansion remains on track," Bernanke said.


Inflation expectations remain contained, he said.


Bernanke acknowledged that the Fed has come a long way since rates were at 1%
in the spring of 2004.


"Although the outlook contains significant uncertainties, it is clear that
substantial progress has been made in removing monetary policy accommodation,"
Bernanke said.


Monetary policy is entering a new era, one in which steady rate hikes are no
longer necessary, he said.


"As a consequence, in coming quarters the FOMC will have to make ongoing,
provisional judgments about the risks to both inflation and growth and
monetary-policy actions will be increasingly dependent on incoming data,"
Bernanke said.


Bernanke said the inverted yield curve -- where the interest rate of the
2-year Treasury note stands above the rates paid on the 10-year note and the
newly revived 30-year "long" bond -- isn't a sign of an economic slowdown.


"At this point in time, the inverted yield curve is not signaling a
slowdown," Bernanke said.


Economists gave positive reviews to Bernanke's testimony.


"I think he did remarkably well," said Gregory Miller, chief economist for
SunTrust Banks.


"He did a good job of keeping his comments precise and on-point," Miller
said.


The questions from the members of Congress did not add much to the overall
picture of the economic outlook and where the Fed might stop in its tightening
cycle.


Instead questions focused on other matters, including education, the minimum
wage, banking regulatory issues and possible mortgage discrimination.

THE FED: Bernanke Doesn't Flesh Out Rate Stance


By Greg Robb


WASHINGTON (Dow Jones) -- Politely, but firmly, new Fed chief Ben Bernanke
declined Thursday to flesh out the Fed's monetary-policy stance.


Bernanke, in fact, went no further than the Jan. 31 statement from the
Federal Open Market Committee, which said that some additional rate hikes may
be needed to counter the threat of inflation.


Economists believe this statement is consistent with a Fed rate hike on March
28 and another on May 10, bringing the federal-funds rate to 5%.


"The market got the message in the sense that I don't think anyone anymore
thinks" the Fed will leave rates steady at 4.5%, said Mike Moran, chief
economist at Daiwa Securities.


This was the market view on rates before the testimony started, said Kevin
Logan, an economist at Dresdner Kleinwort Wasserstein Securities LLC.


"He laid down the same line that the FOMC has been following," Logan said.
"There was very little new or different."


Bernanke gave no details on what might make the Fed stop raising rates or
what risks additional hikes hold. Pressed on these issues, Bernanke retreated
to the position that these decisions would be a group undertaking.


"It is still about six weeks until the next FOMC meeting. We will be
examining the data as it comes in, and my colleagues and I will have an
extensive discussion" about the economy's needs, Bernanke told the Senate
banking panel in the second day of his first report on monetary policy to
Congress.


Bernanke's two days of testimony suggested a goal of minimizing market
reaction and emphasizing continuity with the Greenspan Fed. "Bernanke wants a
smooth transition at the Fed," said Jim Glassman, economist with J.P. Morgan
Chase. "He doesn't disagree with how the FOMC is viewing things."


Some of Bernanke's answers seemed "very scripted," Glassman said.


"I think he tried to say as little as possible in the question-and-answer
portion. It was part of his strategy to be brief and not make waves the first
time around," Moran said.


Sen. Jim Bunning, R-Ky., often a vocal critic of the Fed, asked Bernanke if
he was worried that further rate hikes might damage the economic expansion.


Bernanke's reply: "There [are] two possible mistakes: One is to go on too
long, and one is to not go on long enough."


The Fed has no "mechanical rule" and will be looking closely at "all the
data, trying to make our best assessment of the economy and where it is going
and respond to that," Bernanke said.


Before the Capitol Hill testimony, many economists were worried that Bernanke
would be hawkish to prove his inflation-fighting prowess.


But this proved not to be the case.


On Thursday, Senators expressed most alarm about the expanding U.S. trade
deficit, which hit a new record in 2005.


Bernanke stuck to the message that part of the explanation for the deficit is
the strong U.S. economy, and any attempt to curtail the deficit, he said,
should also be cautious of disrupting prosperity.


Bernanke did agree with those who contend that China should take more steps
to decouple the yuan from the dollar as part of an effort to make the global
trading system more sustainable.


"If you are asking me if I would advocate that the Chinese go to greater
flexibility in their exchange rate, I certainly would," Bernanke said.


"It is in their own long-term interest to do so. It will give them more
monetary-policy independence, it will reduce the overdependence of their
economy on exports," and, he added, it will allow China to assume a greater
leadership role in global economic deliberations.


China adopted new yuan guidelines last July, which allowed the yuan to
appreciate from 8.277 to 8.066 against the U.S. dollar. Most of this move was
in the one-time 2.1% revaluation on July 21. Bernanke joins a chorus of Bush
administration officials who argue that this move is inadequate.