The Bernanke speech: The consensus is often wrong, but this time they hit it pretty close to the mark.
While stocks initially sold off, they have now made a modest comeback.
For the first time in a while, there's no real gaming of the Fed, and many traders think that is a good thing. "True equity bulls don't want people buying because of (quantitative easing) in there with them... they want other true bulls and strong hands," one trader wrote to me.
Bernanke did not make any new policy pronouncements, as expected.
He did say that the meeting in September would be two days instead of one; that may give room for discussion of a larger range of policy responses.
Bernanke reiterated that the Fed had "a range of tools that could be used to provide additional monetary stimulus."
He kicked the ball into the court of President Obama and the Congress: "Most of the economic policies that support robust economic growth in the long run are outside the province of the central bank..."
In other words, he's telling the executive and legislative branches to do their job.
European Central Bank President Trichet is also speaking in Jackson Hole Saturday, and Bernanke lobbed a little grenade in his direction as well: ""I have confidence that our European colleagues fully appreciate what is at stake in the difficult issues they are now confronting, and that, over time, they will take all necessary and appropriate steps to address those issues effectively and comprehensively."
Some are expecting Trichet to signal a more dovish position on rates. _____________________________
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