Squawk Morning Briefing: Opperation Twisting in The Wind

With some recent negative economic news and, more importantly, recent declines in U. S. equities, many traders have hopes of Fed quantitative easing and their were hopes that he would tip his hand during Thursday’s congressional testimony from Chairman Bernanke. The picture painted by recent pronouncements from many Fed governors is clear: even though news from all corners of the globe seem to be disturbing U. S. markets, it will be data on the U. S. economy that drives Fed policy. However, they go on to let us know that a deteriorating global situation is a major risk to our domestic outlook.

Bernanke was quick to point out that Fed easing wasn’t a substitute for necessary fiscal spending and that if the upcoming “fiscal cliff” led to the automatic reduction of many spending programs it would likely do damage to the economy. If nothing else, that should do even more to draw attention to the actions of congress in the coming weeks in addition to the continuing stream of economic news out of Europe, Japan, China, and every other corner of the globe.

Markets seem to move on each new headline. With Bernanke remaining tight-lipped about possible Fed action until the next Fed meeting in about two weeks, traders will likely keep responding to global events while waiting for some word from the Open Market Committee.

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