"We don't think that financial stability concerns should at this point detract from the need for monetary policy accommodation which we are continuing to provide"
- Ben Bernanke, Fed Chairman
Ben S. Bernanke's era is coming to its logical conclusion. Soon Janet Yellen will take over his position on January 31 and will become the world's most powerful woman. ‘Helicopter' Ben is known for his easy-money policy, and it was not a surprise that during a forum in Washington he defended his quantitative easing programme, saying it has helped the U.S. economy and there is no risk of a bubble in asset prices. Bernanke and his Fed are famous for his record-low interest rates, emergency lending measures, controversial bailouts and bond-buying programme, known as quantitative easing, that all are likely to have unintended consequences. Nevertheless, Bernanke claimed the world's largest economy responded well and assured the central bank is still capable of addressing potential risks and headwinds like runaway inflation that may derail economic recovery.
At the same time, the University of Michigan said a gauge of consumer sentiment plunged to 80.4 in January from 82.5 a month earlier. However, this is the first out of two survey's that are reflecting consumers' mood, hence, market reaction was modest. On the other hand, U.S. industrial production advanced for a fifth straight month in December, coming in line with analysts' forecasts. Output at factories, mines and utilities climbed 0.3%, following a 1% gain a month earlier.
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