Jeremy Hobson: So if the markets are Princess Leia, and Ben Bernanke is a Jedi Master, this is a rough transcript:
Star Wars: Help me Obi-Wan Kenobi, you’re my only hope.
Hobson: From American Public Media, in New York, good morning, I’m Jeremy Hobson.
That Star Wars reference was an actual headline in the Atlantic Magazine this week. And that’s because the markets really are looking to Fed Chairman Ben Bernanke as the last hope of stopping a global economic slowdown. Bernanke will be testifying on Capitol Hill today and Wall Street will be watching.
As Marketplace’s David Gura reports.
David Gura: Members of the Federal Reserve have signaled they’d be willing to support further action if the economy gets worse. In the past, the Fed has pushed down interest rates, but now, they’re at all-time lows.
Karen Petrou is with Federal Financial Analytics, and she says that, despite the fact there’s not much more the Fed can do, investors are hopeful Ben Bernanke will decide to do something.
Karen Petrou: The big issue for him are the hints that the market was so ecstatic about yesterday, that there will be some new Fed easing.
Fed easing, that the Federal Reserve will decide, once again, to buy more bonds. But skeptics are worried about inflation, and about the Fed, overstepping its bounds.
Kevin Jacques, who teaches finance at Baldwin-Wallace College, says that’s why the Federal Reserve is being careful.
Kevin Jacques: This is an incredibly difficult balancing act that the Federal Reserve has to go through. They want to be optimistic. They want to help the economy move forward. Yet, at the same time, they recognize there are potential drawbacks to any policy they undertake.
What Bernanke wants to avoid is doing too much or too little, putting him at risk of becoming this economy’s Darth Vader.
In Washington, I’m David Gura, for Marketplace.