Bernanke 'Quietly Risk Negative': Dennis Gartman
Staff Writer, CNBC.com
Federal Reserve Chairman Ben Bernanke’s statement on expectations for the US economy on Wednesday was "quietly risk negative," Dennis Gartman, author of The Gartman Letter, told CNBC Thursday.
After a two-day Federal Open Market Committee meeting, the Fed slashed its growth forecast for this year and said unemployment will still remain high.
"The most important statement that he made was that there will be at least two more FOMC meetings before a change in interest rates. That’s gloomy," Gartman said.
"He was less than optimistic, but I don’t think really pessimistic."
The Fed now predicts that the economy will grow between 2.7 percent and 2.9 percent this year, down from its April estimate of between 3.1 percent and 3.3 percent.
Bernanke said that interest rates would remain at current levels for at least two more meetings of the FOMC.
"As the Fed Chairman became more risk-averse, so did the markets," Gartman said. "If you look at the US balance sheet, it’s actually doing quite well. Corporate America is replete with cash, so if you are a value investor, you would just want to go out and buy everything."
Gartman is not optimistic about employment figures in the US.
"Businessmen and women see Obama Care and other left-wing measures, and they are absolutely unwilling to add more employees to their businesses," he said.
He added that he will keep his gold holdings for the moment, and said: "I’ve been long on gold for a long time and I’m not going to change that at this point."
The British pound is not looking great at the moment, according to Gartman. "I am short on sterling. I think the comments coming out of the MPC are to be taken seriously."
"It is the one to sell if you’re selling anything in Europe. Until the market tells me I’m wrong, I’ll continue to do the same," he added.