Bernanke

Fed Chair Ben Bernanke kept monetary stimulus options open this afternoon in his semiannual monetary policy  testimony and report before the Senate Banking Committee. Ranking Republican Richard Shelby (R-AL) put the question this way:

SHELBY: Thank you.

Mr. Chairman, the minutes of the June FOMC, the Federal Open Markets Committee, meeting stated, and I'll quote, "The committee would need to consider whether further policy stimulus might become appropriate if the Outlook were to worsen appreciably," end quote.

 This is very good news for the market.  Friday's market anxiety level rose considerably when Senators Barbara Boxer (D-CA) and Russ Feingold (D-WI) announced they would vote against Ben Bernanke's confirmation.  Both face tough reelection races.  Previously Democratic Senators Byron Dorgen (D-ND), Jeff Merkley (D-OR), and Bernie Sanders (I-VT) had announced their opposition.  Seven Republicans have announced their opposition so far, including John McCain (R-AZ).  I've always expected the Senate to confirm Mr. Bernanke by at least 80 votes, and I'm more confident now than ever.  A cloture vote of at least 60 votes will still be required, so the Bernanke confirmation vote, requiring just a majority vote, will occur on the second day after Senate Majority Leader Harry Reid (D-NV) files the cloture petition, so no earlier than Wednesday and certainly by the end of the week.