Ben Bernanke (Federal Reserve Chairman) said that the U.S. economy faces “formidable headwinds”, including a weak labor market and tight credit that are likely to produce a “moderate” pace of expansion. Mr. Bernanke´s announcements had a great impact in Currency Trading markets.
Treasuries advanced, as traders pared bets, the central bank will increase interest rates before August. Bernanke, in response to a question after his speech, repeated the Fed’s statement that “rates are likely to remain low for an extended period.”
U.S. stocks declined, wiping out a 0.4 percent advance in the Standard & Poor’s 500 Index, as investors speculated the economy isn’t growing fast enough to shield banks from losses on commercial real estate.
Financial shares in the S&P 500 retreated 1.6 percent, as Wells Fargo & Co. and JPMorgan Chase & Co. lost more than 1 percent after Federal Reserve Chairman Ben S. Bernanke said the U.S. faces “formidable headwinds.” Exxon Mobil Corp. slid 0.7 percent as crude slumped 2 percent for a fourth day of declines. The dollar strengthened to the highest level against the European currency in a month.