…if we get a big upward GDP revision this morning ahead of Bernanke?
Economists are looking for a downward revision to 1.1% growth in Q2 from the original 1.3% growth rate.
The Bernanke speech is eagerly awaited but expectations for hints at QE3 have been lowered throughout the week. Most expect a rehash of Bernanke’s Humphrey-Hawkins testimony in July where he laid out several alternatives to more bond buying:
One option would be to provide more explicit guidance about the period over which the federal funds rate and the balance sheet would remain at their current levels. Another approach would be to initiate more securities purchases or to increase the average maturity of our holdings. The Federal Reserve could also reduce the 25 basis point rate of interest it pays to banks on their reserves, thereby putting downward pressure on short-term rates more generally.
We’ll know soon enough…