Market Rally Continues; Signs of Credit Easing

Federal Reserve Board Chairman Ben Bernanke testified at the House Budget Committee on October 20, saying the recent measures taken by the Fed, Treasury, the FDIC, foreign central banks, and the Congress “will help restore trust in our financial system and allow the resumption of more-normal flows of credit to households and firms.” Bernanke was quick to say that such a restoration “will not quickly eliminate the challenges still faced by the broader economy.” He admitted, moreover, that with the economy “likely to be weak for several quarters, and with some risk of a protracted slowdown, consideration of a fiscal package by the Congress at this juncture seems appropriate.”