Bernanke Says about Reserve Rate USA

Bernanke says rates to stay low for long time
Federal Reserve Chairman Ben Bernanke told Congress on Wednesday that a weak job market and low inflation would likely allow the central bank to keep interest rates at very low levels for a long time.

Bernanke Says Reserve Rate Change Will Effect Longer Yields
Bernanke said, "By increasing the interest rate on reserves, the Federal Reserve will be able to put significant upward pressure on all short-term interest rates. Actual and prospective increases in short-term interest rates will be reflected in turn in longer-term interest rates and in financial conditions more generally."

Bernanke: Discount Rate Hike Was Move Toward Normalizing
Bernanke said the increase in the discount rate was made "to discourage banks from relying on the discount window rather than private funding markets for short-term credit." He views this as a move to normalizing lending to commercial banks through the discount window. (KGM)


EUR Settles Down In Wake Of Bernanke Comments
After some choppy trading that saw it rise to a session high of 1.3597 on Fed Chairman Ben Bernanke's testimony, EUR has settled back to the 1.3560 area. The biggest impact of Bernanke's message of continued low rates was on the USD/JPY pair, which slipped to a session low at 89.78, according to EBS via CQG, before rebounding to current level at 89.84. (DBC)


Rate Futures Prices Up On Bernanke, Weak Data
U.S. rate futures prices hit intraday highs across the curve, reflecting expectations for lower yields. Move occurs as Bernanke says rates need to stay very low, that inflation will remain subdued for a while, and as data shows new home sales plunging to record low. Quarterly 2010-12 Eurodollar futures recently up as much as 6 BP. Mar 10-yr Tsy notes take out Tues' high, reaching 118-11. Resistance at last week's top of 118-13+. Mar 30-yr Tsy bonds hit 2-week high of 118-09 as 30-yr cash yield equivalent falls below 4.625%.

New York Funding Rates Set Lower
ICAP's US quotes on interbank lending are set lower Wednesday morning, with the 1-mo New York funding rate at lower 0.2156% from 0.2175% Tuesday and the 3-mo rate lower to 0.2512% from 0.2569%. Earlier Tuesday, the BBA quoted the benchmark 3-mo dollar Libor rate unchanged at 0.25194% from Tuesday