The Federal Reserve Chairman Ben Bernanke is beginning to testifying in front of the Joint Economic Committee. In his opening remarks, the head of the central bank has signaled that he shall continue to keep the current quantitative easing program in place. Traders and investors can easily see the decline in the U.S. Dollar Index after his comments were released. Chairman Bernanke warned that reducing the Federal Reserve’s efforts to keep borrowing rates low would carry a substantial risk of slowing or ending the economic recovery. This means that he will keep interest rates at zero percent and continue to buy $85 billion a month worth of mortgage backed securities and U.S. Treasuries for the foreseeable future.
Large financial stocks are soaring higher after the news. Leading stocks such as J.P. Morgan Chase & Co (NYSE:JPM), Goldman Sachs Group Inc (NYSE:GS), Morgan Stanley (NYSE:MS), and BlackRock Inc (NYSE:BLK) have all risen sharply higher leading the rally in the major stock indexes today.