WASHINGTON (MarketWatch) — Federal Reserve Chief Ben Bernanke is likely to use a speech Monday to try to focus the market’s attention back on the central bank’s aggressive easing policy and away from the doubts about the policy, Fed watchers say.
“He’s going to right the ship,” said Michael Gregory, senior economist at BMO Capital Markets, said Friday. Top Fed officials have discussed the central bank’s new asset purchase plan since the Sept. 13 decision.
The stock market reacted negatively on Tuesday to a strong rebuke of bond purchases from noted hawk Charles Plosser, the president of the Philadelphia Fed Bank. Plosser said the program wouldn’t create jobs and risked the Fed’s credibility. Plosser slams QE3.
In response, Bernanke will likely stress that quantitative easing works and the benefits are manageable, economists said.