Investors want Bernanke to keep playing the same tune, because the stock markets will benefit from still more stimulus from the United States Federal Reserve.
Yesterday markets thought it was a given that that Bernanke would extend Operation Twist for a few more months. The $400 billion dollar program will sell near-term debt in order to buy long-term debt.
Today will determine how long the program will run, and people are predicting that it will last until presidential elections take place in November.
Many people the Fed to print more money, an action that would be called QE3 (Quantitative Easing 3), but the Operation Twist option also makes sense because it creates an attractive environment for investing in the stock market instead of dealing in low-yield fixed income.
It's helpful to be powerful enough to use monetary policy to deal with the crisis.
