Bernanke testimony this week clearly shows a Fed which would love to prepare the US economy for the beginning of the end of stimulus. Without committing to further stimulus yesterday before the Senate and in his testimony before the House today, the Fed Chairman stated he did not see a double dip recession. His message. The beginning of the big wean or the end stimulus is being cautiously prepared.
The problem of course is if it were not for the European economic problems, Bernanke would be more confident in the initiation of the end plan. If Europe can repair itself even ever so slightly, then the markets will not need much more help.
Now the markets may not like the thought of growing ever so slowly all by themselves which is probably not good for owning equities right now. In fact, it is the first time since 2008 the Fed has indicated it may not be the great asset enabler in the next investment cycle. Thus the buy for equities was between March and September of 2009 and the potential end of that Fed enabling run may be March to September of 2012.
