The Markets

The Fed made some pretty bold statements last week. Speaking to world monetary policymakers at a meeting in Jackson Hole, Wyoming, Ben Bernanke told the group that "policy options are available to provide additional stimulus." Not only that, the Fed Chairman listed what those options might entail; more purchases of long term debt and possibly lowering the interest rate banks are paid for their reserves. Both of these options would have the effect of lowering even more the current historically low interest rates.

According to the Wall Street Journal, most analysts rule out the possibility of the U.S. slipping into another recession. Nonetheless, the fed has made it abundantly clear that it has no plans to raise interest rates for the foreseeable future. The hope is that by keeping the rate to borrow so low, companies will be more likely to put their capital to work by hiring and/or investing in capital improvements.

All of this came on the heels of second quarter GDP being revised downward from 2.4% to 1.6%. More signs that the economy is slowing down.

The markets had one of its best days recently on the news from Jackson Hole. Whether this will be the catalyst the market has been looking for to find higher ground or the sideways pattern we've seen for the last few months will continue remains to be seen.