Most of the US financial shares traded lower on Wednesday ahead of the Federal Reserve’s expected outlook on the economy and its plans for monetary policy later in the day. Federal Reserve officials are trying their best to stay out of the limelight this week out of fear that any steps they might take could be construed as tightening policy. According to the analyst point of view on Wednesday, the Financial Select Sector SPDR ETF (XLF) dipped 0.4% to $15.27. Most financial stocks on the Standard & Poor’s 500 traded lower, but American International Group’s (AIG) shares were up 1.3% to $46.38.

On the other hand in the US, two of the nation’s largest banks have eased controversial overdraft rules for customers as the financial-services industry faces criticism over charging lucrative fees to boost sagging profits in the recession. In Europe, the European Commission on Wednesday cleared asset management company BlackRock Inc. (BLK) to buy Barclays Global Investors from U.K. bank Barclays PLC (BCS). BlackRock shares climbed 4.5% to $217.60.

On the political front, the US Treasury Secretary Timothy Geithner on Wednesday defended the department’s proposal to create a Consumer Financial Protection Agency before a House of Representatives committee, saying it is needed to supervise banks as well as write rules for mortgages and credit cards.

So, these all things are clearly showing that the US is improving slightly so time is demanding some more efforts n order to support the US financial situation.

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Bernanke also added in his speech that it’s still going to feel like a very weak economy because credit conditions remain tight and a decline in the unemployment rate will probably only happen gradually, the WSJ wrote.

If that’s the case, is the recession really over?

Technically, economists expect the gross domestic product to expand by about 3 percent this quarter, which would halt the slide. But if unemployment continues to rise, as it is likely to do, should we be defining the recession in such narrow terms?

Now, we can hope the best that this long recession has been ended which was lingering and the recovery of it will become the cause of the US financial and economical growth. President Obama and his administrations are doing their job as the best as they can. So, I am very hope full that with continues efforts President Obama will get his goal of life and lead our country on the way of success.

As we know that U.S is in the Decade’s worst financial and economical crunch and Obama is giving his 100 % to resolve all these issues. Mr. Obama is trying to shape Fed policy. He has already appointed one Fed governor, Daniel Tarullo, and has an opportunity to fill two more vacancies in the months ahead. The reappointment of Ben Bernanke is a very good decision made by the President Obama. Mr. Bernanke’s to-do list is developing rules to close big, failing financial institutions like Bear Stearns Cos. and Lehman Brothers Holdings Inc. outside of bankruptcy court. It has been nearly 18 months since the failure of Bear Stearns, and Congress hasn’t passed legislation giving the Fed and Treasury the authority they are seeking to deal with institutions other than banks that they deem too big to fail. Bernanke is doing a fantastic job so, In the two years since the onset of the global financial crisis, Mr. Bernanke’s Fed has cut short-term interest rates nearly to zero, has initiated a slew of ways to bypass banks to keep credit flowing in the economy, and is on course to purchase up to $1.25 trillion in mortgage-backed securities and $300 billion in long-term U.S. Treasury.

Mr. Geithner gave a proposal to Mr. Bernanke and he has opposed to strip the Fed of its power to oversee consumer-finance protections. Lawmakers, including Senate Banking Chairman Christopher Dodd of Connecticut, are wary of giving the Fed more power to oversee large financial institutions after some big banks, like Citigroup Inc., teetered under its oversight. Earlier this month, Mr. Geithner lashed out at other financial regulators in a private meeting for not taking a unified stance with the Treasury on overhauls. So, Ben Bernanke’s to do list is long where he has to settle down the Mortgage crisis, renomination elation, Wall Street crisis, banking sector collapse and countries other problem and we are hoping that he will be successful in the future!

In nominating Bernanke last week, When president Obama nominating the 2^nd time Mr. Ben Bernanke as the Fed chairman he was so confident that he got the right man who can save our country form the financial disaster! President Barack Obama praised the Fed chairman for his “bold action and out-of-the-box thinking,” saying it had helped avoiding a repeat of the Great Depression, because the bold actions of Bernanke, lending hundreds of billions of dollars to banks and businesses, slashing overnight interest rates to nearly zero, having the Fed almost single-handedly finance the mortgage market will have to be reversed or rolled back over the next few years. There is a possibility that if the Fed shifts too quickly from the role of savior to that of strict disciplinarian, it risks aborting the recovery and tipping the nation back into a recession, essentially repeating mistakes made in 1937 when the economy had begun to rebound. If the Fed moves too slowly, it risks the kind of intractable inflation it experienced in the 1970s and fueling another bubble.

For the first time in almost 20 years, the Fed may soon have to make unpopular decisions like the decision to raise the cost of borrowing even when the economy still feels weak. It has already decided it must at some point next year, the Fed may well need to raise interest rates possibly rapidly and sharply, given how far it cut them last year and in the process raising the cost of things like’s credit cards, mortgages and business loans. Now, its Bernanke responsibility that how well he tackles with these problems and provides the nation, best possible and positive results!

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“His biggest legacy for sure will be having designed and implemented a policy for dealing with an intense financial crisis,” said former Fed governor Laurence Meyer, now vice chairman of St. Louis-based Macroeconomic Advisers LLC. “Here is what is amazing: It was ad hoc, yet it looks very good.”

Bernanke’s first test on inflation will be reversing the $1.2 trillion in additional Fed credit his policies created. The challenge will be to maintain the Fed’s credibility for keeping prices stable, while avoiding a premature increase in interest rates that may snuff out an emerging recovery. The chairman devoted a section of his semiannual testimony before Congress in July to his exit strategy, saying the Fed could neutralize money in the banking system through tools such as interest on reserves, reverse repurchase agreements, or outright sales of securities. As, president Obama is expecting high from the reappointment of the Bernanke. We are hopeful that he is the man who can lift up and save our current economical conditions form the further disaster!

Watch the video “Obama Keeps Bernanke at Fed”

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We know that, everyone loves a central banker when he’s doing best of flooding the economy with money. But Mr. Bernanke will sooner or later have to say no to the political class. This is something he has never done, and already there are signs in China and the edges of the dollar bloc of new asset bubbles. Mr. Bernanke has also tended to be a domestic central banker, ignoring the Fed’s larger role as steward of the world’s reserve currency.”His money-withdrawal task will only be harder because of the Fed’s extraordinary forays into fiscal policy and credit allocation since the crisis began. The Bernanke Fed has also become nearly an arm of the Treasury by endorsing a spendthrift stimulus and by directly buying federal debt for the first time in a half-century.”

All of these steps helped the country narrowly sidestep a much deeper financial panic than the one we had. Let’s recall that in July, analysts began issuing reports saying that the “recession is over.”I am hoping the best to see my country again on the top and economically strong so, Bernanke might be a right man to resolve the countries “financial bubble” which is very much important!

U.S Government is trying their very best to give comfort to their citizens and but keeping the rates unchanged could be a major reason of failure of their attempts. In The U.S Fed is a part of US Federal Reserve system and a back bone Organization in US. This organization is a major authority of making the policies and rules related to the countries financial and economical decisions. The unchanged rate was no surprise to the markets which had placed the probability of a rate change at nearly 0% as indicated by the Fed Funds Futures price action. In a statement Fed said “it’s a leveling out” in economic activity and indicated that substantial resource which is slowed down in commodities and have to keep inflation down. The Fed did say, however, it expects the economy to remain weak for a time.  The Federal Reserve on Wednesday kept its key interest rate near 0% as estimated and it would end its purchase of $300 million in Treasury securities in October, one month later than previously announced. The Fed is expected to maintain the current rate between 0 and 0.25 percent.

The Federal Funds Rate is that rate at which banks lend their Federal Reserve balances to each other. The unchanged rates has affected the stock market as well world stock markets shot higher Thursday after the US Federal Reserve said the world’s largest economy appeared to be “leveling out” from its worst recession in decades. So, it’s very much clear that now there is much need of change the rates of banks and so that economy can go up and people get relax!

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