Bernanke: QE2 Is Intended to Boost Stock Prices

From Bloomberg:

Federal Reserve Chairman Ben S. Bernanke said resuming large-scale asset purchases should boost economic growth through lower borrowing costs and higher stock prices and that concerns about the strategy are “overstated.”

“This approach eased financial conditions in the past and, so far, looks to be effective again,” Bernanke said today in an opinion article for the Washington Post released hours after the Fed announced the $600 billion of Treasury buying through June in a second round of unconventional monetary stimulus.

“Stock prices rose and long-term interest rates fell when investors began to anticipate this additional action,” Bernanke said. “Easier financial conditions will promote economic growth.”
Bernanke said that low and falling inflation indicates that the economy has many idle resources and that further monetary policy efforts will not cause the economy to overheat.

http://www.bloomberg.com/news/2010-11-03/bernanke-says-new-purchases-should-aid-economic-growth-with-lower-rates.html