All Eyes on Bernanke – The Press Conference

by Crocker on April 27, 2011, 6:59 am

in Economics,Politics

All eyes are on Ben Bernanke, who’s set to conduct his first formal press conference at the end of the Fed meeting at around 2.15 PM ET. As I noted a couple of days ago, Fed chairmen don’t generally do pressers during Fed meetings. Fed proceedings usually have all the transparency of the College of Cardinals picking a Pope.

Nobody expects any change in interest rates but there’s considerable speculation about what the Fed intends to do when QE2 ends in June. Who’s going to buy US treasury debt then? The hot talk is that the Fed will use “economic repression” to force banks and mutual funds to purchase treasuries – probably under the guise of increasing bank cash reserves, or some such. Remember, somebody’s got to buy the debt, so long as the Congress continues to spend. This is not optional. Congress may legally authorize raising the debt limit but this means merely that the US Treasury is then permitted to float more debt. It doesn’t mean that there will be buyers.

Mark Levin had an interesting segment on his program yesterday about this very thing and it’s worth the 15 minutes.

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