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Daily Market Update 2/10/10

Rates held steady Wednesday as Federal Reserve Chairman Ben Bernanke released details of Fed monetary policy tightening plans. Bernanke had been scheduled to speak before the House Financial Services Committee, but he could not deliver the speech or answer questions due to snow in Washington. The Federal Reserve may raise the Discount Rate, the interest rate charged to member banks on overnight loans from the Fed, “before long”, in an effort to normalize monetary policy. Bernanke said he does not expect the Fed to begin selling the $1.43 trillion of mortgage-backed securities it has purchased “at least until after policy tightening has gotten under way and the economy is clearly in a sustainable recovery.” Stocks moved sharply lower on the announcement. In economic news, the December Trade Deficit was larger than expected. No other data will be released today.

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