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Bernanke: a matter of credibility

Business Times - 28 Jul 2009


Bernanke: a matter of credibility

With anti-Fed sentiment growing, investors are waiting for Obama to decide if he wants Bernanke to continue at the Fed

By LEON HADAR
WASHINGTON CORRESPONDENT

FOR more than a year now, the US central bank has been pumping a huge amount of money into the economy - expanding its loans in the form of currency swaps with foreign central banks and directing lending to US banks - in order to get it moving again. And there are some signs that this policy is generating the conditions for an economic recovery.

Indeed, reflecting a bullish moment on Wall Street, better-than-expected corporate results and housing sales propelled stocks last Thursday, left the Dow and S&P 500 at more than eight-month highs and the Nasdaq at a more than nine-month high (although stocks slumped after that on Friday, as unsatisfactory quarterly results from Microsoft, Amazon.com and American Express gave investors a reason to draw back after the Thurs…