The fluffy clouds hung over the Grand Tetons last week. Outside Jackson Lake Lodge, there is an unparalleled view of the majestic mountains where tourists gather each morning to watch the sun splash the peaks with glorious color.
Inside the lodge, there was less light. “Federal Reserve Chairman Ben Bernanke gave no hint Friday as to whether the central bank was leaning toward easing fiscal policy again in an effort to rouse the sleepy U.S. economy,” wrote Fox Business Channel´s Dunstan Prial. “Instead, in a closely-watched speech at the Federal Reserve’s economic symposium in Jackson Hole, Wyo., Bernanke made a point of saying monetary policy alone isn’t a cure-all for the economic ills that have plagued global markets since the credit crisis of 2008.
Prial noted: “Bernanke’s dour assessment of the U.S. economy hardly extinguished speculation that another round of bond buying could be announced at the Fed’s September meeting.”
“As we assess the benefits and costs of alternative policy approaches, though, we must not lose sight of the daunting economic challenges that confront our nation,” said Bernanke. “The stagnation of the labor market in particular is a grave concern not only because of the enormous suffering and waste of human talent it entails, but also because persistently high levels of unemployment will wreak structural damage on our economy that could last for many years.”
“As is common of Fed pronouncements, Bernanke hinted but offered no certainty of action to come. Still, the urgent tone of his remarks will leave investors disappointed if the Fed does not launch new stimulus at its Sept. 12-13 policymaking meeting. Investors seemed hopeful, with stocks trending up by about 1 percent in the early afternoon,” reported the Washington Post. The New York Times Binyamin Appelbaum saw things more clearly, writing that Bernanke “delivered a detailed and forceful argument on Friday for new steps to stimulate the economy, reinforcing earlier indications that the Fed is on the verge of action.”
“Bernanke offered a full-throated defense of the Fed's past efforts to juice the economy and promised that more help could be on the way—admonishments to the contrary be damned,” wrote Barron´s Bradley Davis. “Bernanke did all but hit control-P in his speech from Jackson Hole, Wyo. If the Fed embarks on another round of quantitative easing—"printing money" by committing to buying large amounts of long-term Treasury bonds—Treasury prices would rise and yields would fall.”
European Central Bank President Mario Draghi skipped the meeting, but in Europe, there was still no assurance that the sun would shine anytime soon. Unemployment there reached the highest level since 1999 when the European monetary union was put in place. “The 11.3% unemployment rate, up 1.2 points from a year earlier, failed to come down after joblessness increased in Spain and bailed-out Greece. In Spain youth unemployment stood at 52.9%, in Greece at 53.8%,” noted The Guardian. The Financial Times wrote that German citizens were ready to cut Greece loose from the euro.
So sign yet when central bankers were cut loose from their failed policies.