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Mr. Bernanke offered no explicit hint that the central bank will reduce the benchmark federal funds rate at the next policy meeting on Sept. 18, and his remarks suggested that the Fed was unlikely to take any action before that date unless economic conditions deteriorate unexpectedly.
But he said nothing to dissuade investors from expecting a rate cut at that meeting. That helped buoy Wall Street, which has been betting on the near-certainty of such a move ever since the Fed took a partial step on Aug. 17 by reducing its discount rate, which applies to emergency short-term loans to banks.
In anticipation of the speech, the stock market rallied, with the Dow Jones industrial average jumping as much as 140 points. Once Mr. Bernankeâ€™s remarks were released at 10 a.m., investors trimmed those gains in half. Stocks bounced around for the rest of the day, but closed solidly up.
The Dow added 119.01 points, or 0.9 percent. The broader Standard & Poorâ€™s 500 stock index gained 1.1 percent to close at 1,473.99; the Nasdaq composite closed at 2,596.36, up 1.2 percent.
In the long-awaited speech, his first since the nationâ€™s credit markets began to seize up several week ago, Mr. Bernanke made it clear that the Fedâ€™s decision to cut interest rates will heavily depend on what happens to the housing and housing finance.