News Headline Summary

Fed's Bernake says Fed doesnt take view that tighter is always better

Says:
- Fed has encouraged banks to rent out foreclosed homes
- Fed is trying to help in housing lending
- Barriers to housing recovery are many and diverse
-'Not a single magic bullet' in housing lending
- Interest on excess reserves are important
- Doesn't rule out cutting interest rates on excess reserves
- Fed to use interest rates on reserves when it tightens
- Stimulative effect of cutting IOER rate 'Very very small'
- He sees a range of possibilities on Fiscal cliff
- Fed will try to secure better labour market
- Fed ability to offset headwinds is infinite
- Fed doesn't have tools to prevent going off cliff

Reaction details (12:21)

- e-mini S&P hit a low of 1376.25 before bouncing off the daily pivot at that level.
- Limited reaction was observed in the USD-Index.
- T-notes moved 3 ticks higher before pulling off recent highs; trades 133.21+.

Analysis details (12:19)

- Since Bernanke has begun his press conference US equity markets have seen selling pressure as Bernanke suggest that further QE from the December meeting is unlikely, and rules out cutting the IOER rate. T-notes have been more resilient to these comments, edging slightly higher with safer-haven flows however capped due a reduction in the likelihood of large scale asset buys.

20 Nov 2012 - 12:01 - Fixed Income Bank Speaker - Source: Newswires

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