The Fed Speaks

After Congressional Republicans sent Fed Chief Bernanke a letter that
politely demanded the Fed cease on desist on all stimulus activities, I
half expected Bernanke to drop a liquidity bomb on the market
yesterday.

Who is Responsible?

Not only are we failing to get any traction to
employment due to the stagnant economy, companies that have screwed up are
continuing to shed payroll to get costs in line with their revenues,
companies like Bank of America (NYSE:BAC) and
Cisco (Nasdaq:CSCO).

Investors Look for Silver Lining


Today is Fed day. Bernanke will have spoken by the time you read this, so I
will not go into any detail about my own expectations. Suffice to say I
don’t expect the Fed to announce any new stimulus.

The U.S. economy expanded at a 1% rate in the second quarter. This is
revised lower from 1.3%. Investors expected this, so it’s not a market
moving number.

Growth actually improved from the first quarter, and that’s one reason I
think the Fed stands down today. We should expect growth to pick up a bit
more for the end of the year.