Market Commentary: The world’s economic outlook darkened on Friday as reports showed U.S. employment growth slowing sharply, Chinese factory output barely growing and much of Europe continues to teeter on the edge of financial disaster.
Don’t worry -- Fed Chairman Bernanke and other voting members of the Federal Open Market Committee have said repeatedly that they stand ready to take whatever measures necessary to prop up the economy.
Just last week the Fed helped engineer a drive that pushed the yield on the U.S. 30-year bond to its lowest level in more than 200 years. In the face of this record low interest rate – the economy barely managed to create a few more jobs than it lost last month.
You can bet investors will be listening intently to see if Mr. Bernanke and his band of central bankers have anything else other than more fiscal stimulus programs like “QE3” up their collective sleeves. It is now blatantly obvious lower interest rates don’t seem to be doing much to induce businesses to hang out their “Now Hiring” signs. If the patient is not responding to massive amounts of one prescription -- insisting on increasing the dosage may ultimately prove more harmful than helpful.
