Budget deficit

Last Wednesday, Federal Reserve Chairman Bernanke delivered testimony to Congress, taking great pains to clarify Fed policy. His comments were well received because stocks moved higher and interest rates retreated. Our first article examines what the Chairman said and what he really meant. Though the economy still may need Fed support to reach “escape velocity” (i.e., where it can grow by its own momentum), our next article by Liz Ann Sonders of Schwab takes a look at the plunging Federal budget deficit and what it means. Finally, we summarize a recent poll by the Institute of Chartered Financial Analysts about expectations over the next 12 months.