Ben Bernanke: Sometimes a Speech Is Just a Speech

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Photo: Andrew Harrer/Bloomberg via Getty Images

This morning Paul Krugman predicted that Ben Bernanke wouldn't announce anything big in his speech in Jackson Hole today, maybe because he was afraid of the Rick Perrys of the world. Krugman was right — although the reasoning may be more related to the fact that Bernanke's hands are relatively tied since interest rates are near zero already. The Fed chairman didn't announce any new policies in the speech, but noted that "the recovery from the crisis has been much less robust than we had hoped." Some market watchers had hoped for a QE3, or another round of quantitative easing (in which the Fed buys back government debt). But none look to be forthcoming, and as a result, stock indexes briefly dipped. They appear to have rallied again on hints that a QE3 could be considered during the September meeting of the Fed board. Meanwhile, the dollar gained strength on the news that there wouldn't be quantitative easing — a strategy that critics have likened to "printing money." With regards to the debt-ceiling debacle, Bernanke pleaded for "a better process for making fiscal decisions."

Live Blog: Thus Sprach Bernanke [WSJ]