Weekly Fundamentals - Commodities Soared after Bernanke Signaled no QE3

27 August 2011 27 August 2011

BonTrade

The long-awaited Jackson Hole symposium turned out to be a non-event with Fed Chairman Ben Bernanke not signaling additional quantitative easing measures in his speech. Yet, this had not driven much disappointment. Wall Street reversed initial losses and ended the day 1-1.5% higher. Bernanke's speech sent an indication that the US economy is not too bad and his view of long-term outlook is 'more optimistic'. More importantly, the Chairman said that the Fed 'has a range of tools that could be used to provide additional monetary stimulus' and the September FOMC meeting will 'allow a fuller discussion' on the economic outlook and Fed's actions.