WASHINGTON - Ben Bernanke's sway over financial markets has been on full display in recent weeks. When the Federal Reserve chairman speaks Wednesday to Congress, investors will once again parse each word for any subtle shift in the Fed's stance on interest rates.
Bernanke has sent financial markets plunging and surging the last two months, depending on whether he was seen as loosening or affirming the Fed's commitment to ultra-low interest rates. Low rates have fueled home sales, encouraged borrowing and spending, lifted stock prices, and helped support economic growth.
Since the financial crisis erupted in 2008, the Fed has kept its benchmark short-term interest rate near zero. And since late last year, it's been buying $85 billion a month in mortgage and long-term Treasury bonds to try to reduce long-term rates and induce people and businesses to borrow and spend.