What Bernanke Didn't Say ( What Do You Say)

Market Reaction Mixed

April 2, 2008, 12:51PM EST

Later in the hearing, Sen. Edward Kennedy, D-Mass., raised his voice, repeatedly asking Bernanke to give his views on fiscal measures that could be taken by Congress and the Bush Administration. Bernanke declined to do so.

Market reaction to Bernanke's testimony was mixed. Stocks initially dipped, then rose slightly. Economists at Bear Stearns noted Bernanke "downplayed risks [of] inflation," which they interpreted as "leaving the door open to a further rate cut on Apr. 30." They speculated that it would be only a quarter-percentage-point cut, however.

Bernanke said he expects more economic growth in the second half of this year and into 2009, helped by the government's $168 billion stimulus package of tax rebates for people and tax breaks for businesses as well as the Fed's aggressive rate reductions. "Much necessary economic and financial adjustment has already taken place," he said, and monetary and fiscal policies are in place "that should support a return to growth in the second half of this year and next year."

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