Not a single mention of the yield curve. Maybe under Bernanke we'll have kinder, gentler, more compassionate recessions.
"Bernanke impressed during his testimony when he referenced an important bond-market model of inflation expectations calculated from the difference between inflation-indexed bonds and cash bonds. These forward-looking bond-market indicators tell Bernanke that inflation worries are "well anchored" and that the Fed's interest rate target should stop at 4.75 percent or 5 percent, at most."
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Actually during the testimony, he was asked about the yield curve and he said an inverted yield curve doesn't necessarily mean a recession.
I have hopes for Bernanke, that he will indeed focus on yields, instead of thinking that regulating the stock market and house prices is in his charter, as Greenspan thought.
Kudlow was one of the few who pointed out Greenspan's fata mistake, which plunged us into recesssion.
"Remember, in the second half of the 1990s, unemployment dropped to 3.9 percent, while real economic growth averaged above 4 percent -- both of which occurred without upward inflation pressures. But the Fed worried about "irrational exuberance" and made the wrong policy call -- it began aggressive over-tightening that led to a generalized deflation of commodity, equity and business investment. This was Alan Greenspan's biggest mistake, predicated on a short-run Phillips curve trade-off that gave the central bank a very bad policy signal. "
I think Bernanke, this being his first testimony in front of Congress, was threading lightly, but I think he will hopefully focus on monetary policy and leave the rest to the market economy.