Fed chairman Ben Bernanke testified to the House Financial Services Committee on Wednesday that interest rates have increased slightly as a sign that the economy is recovering.
He said it is a sign that the Fed’s stimulus program is working and that improvements in the auto and housing industries are further proof. The Fed chief testifies to Congress on a semi-annual basis.
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US durable goods orders excluding transportation gear rose the most in over a year and existing home sales rose more than expected.
This sent the stock market to another five year high, the second in as many days, on greater optimism about the economy.
The S&P 500 index also achieved a five-year high on February 19 on an improved consumer spending report.
Bernanke said the Fed would soon conduct a review of its exit strategy from its current bond-purchasing program.
The existing strategy calls for selling assets and raising benchmark interest rates. Another option would be to hold the securities
a bit longer until they mature.