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Testimony of the Fed Chairman Bernanke

Read the following url link to the Federal Reserve on the testimony of the Fed Chairman Bernanke given on Feb 15, 2007 and answer the questions followed. http://federalreserve.gov/boarddocs/hh/2007/february/testimony.htm

a. Give a few reasons for the unexpected but significant positive impact of this testimony on the Wall Street on that day

b. Does this testimony indicate that the Fed will not reduce the federal fund rate from its existing rate 5.25% for the rest of the year 2007? Why or why not?

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STEP 1
a. Give a few reasons for the unexpected but significant positive impact of this testimony on the Wall Street on that day
1. The testimony said that the real activity in the United States expanded at a solid pace in 2006 and this would have a positive impact on the US business.
2. The inflationary pressures seemed to have been in control.
3. The testimony said that personal consumption expenditures increased at an annul rate of three and a half percent and this would have a positive impact on the US business.
4. The testimony said that there was ...

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