Stocks fell off their highs of the morning while Treasuries and the dollar rallied following a horrendous consumer confidence report and downbeat comments by Fed Chairman Ben Bernanke.
The Conference Board’s consumer confidence index plunged to an all-time low in February. The latest reading of the index, which came in at 25 – far below the expected level of 35 – was down from last month’s 37.4 level. In a statement, Lynn Franco, the director of the Conference Board’s Consumer Research Center, warned that while economic conditions “have grown more dire,” consumers are anticipating “no improvement in conditions over the next six months.”
That prediction from the Conference Board may be quite optimistic, however.
In his semi-annual report to Congress, Fed Chairman Ben Bernanke addressed the Senate Banking Committee and cautioned that “full recovery of the economy from the current recession is likely to take more than two or three years.” He believes that the recession will end this year as long as the markets stabilize, and that a recovery would begin in 2010.
In the meantime, the Chairman continues to expect interest rates to remain low “for some time.”
- Bernanke: Strong Action Needed To End Recession
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