At 10:00 AM on Thursday, March 25th, Federal Reserve head Ben Bernanke will testify on the twice yearly Monetary Policy Report before the House Financial Services Committee in Washington, DC.
This is one of the more critical talks by Bernanke through out the year. It’s a 2 part speech with the first part being made public at the Federal Reserve’s website 6 weeks ago so there will not be any surprises during the first part. http://www.federalreserve.gov. The second half holds the most intrigue as it is an unscripted question and answer session. The lawmakers can make some pretty off the wall and probing inquiries that sometimes cause the speaker to reveal information that they planned on keeping private.
Economists are expecting Bernanke to lay out his strategy for wrapping up the current stimulus driven policy getting the economy back to normal functioning. In addition he will focus on the implications of the current recovery. The USD is surging against a battered Euro. The technical support of the EUR/USD pair has been broken. I don’t foresee Bernanke doing anything to hurt the USD during the second part of his speech. I am expecting the USD to gain more strength as possible tightening may be mentioned. The troubles in the Eurozone are weighing heavily on the Euro. This may be a perfect storm for the USD to regain dominance.
David Goodboy is Vice President of Business Development for a New York City based multi-strategy fund.