Daily Clueless Musings 3/1

Bernanke's Humphrey Hawkins testimony is unsurprisingly boring. Traders who paid up for theta yesterday must hate themselves now. Ben's remarks at the Humphrey-Hawkins testimony are not much different from those he made on other occasions in recent weeks. He noted that the pass-through from commodity prices to broader price indexes has been "quite low in recent decades." Therefore, "the most likely outcome is that the recent rise in commodity prices will lead to, at most, a temporary and relatively modest increase in US consumer price inflation--an outlook consistent with the projections of both FOMC participants and most private forecasters." The central banks from China, Brazil, India, UK and most the other countries all wish Ben's statement is remotely true. Chairman’s statement sends a very dovish signal to the market, so Oil traded higher. Ironically, gas is a cost input on a lot of the consumption activities in the US. Higher gas price does help to suppress retailers' pricing power, thus lower inflation pressure, maybe. Bravo! Ben, great job!