Bernanke’s June 3 testimony

Ben Bernanke testified before a House committee on June 3.  Although it doesn’t appear as if he said anything new or different from his previous public statements, I found one statement to be significant.  It is bolded below:

“We continue to expect overall economic activity to bottom out, and then to turn up later this year….An important caveat is that our forecast also assumes continuing gradual repair of the financial system and an associated improvement in credit conditions; a relapse in the financial sector would be a significant drag on economic activity and could cause the incipient recovery to stall.

He has stated this “caveat” in various ways recently.  I find it to be interesting, if not a little puzzling.  In my opinion, it is almost like saying, “It will be sunny tommorrow, unless it rains.” 

I’m not sure as to his reason for including this phrase, but I think it significant nonetheless…

SPX at 930.96 as this post is written

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