Bernanke sounded very much like a traditional central banker, not having to make up policy on the fly for the first time in quite a while. He hit on the major themes that markets wanted to hear from any central banker. They are :
- Price stability and the ability to wind down the extraordinary programs in a timely manner; he vowed not to monetize the debt. After competing the $300 bln Treasury buy, the Fed will have fewer on its balance sheet than when the crisis began, he said.
- The need for fiscal responsibility, He pointedly blamed some of the rise in yields to deficit fears
- The importance of dollar strength and the way to achieve it, via a strong (balanced) economy.
