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JPMorgan Chase Wins Again

Stocks in this article: JPM KEY I:BKX

NEW YORK ( TheStreet) -- JPMorgan Chase (JPM) was again winner among the nation's largest banks on Wednesday, with shares rising over 1% to close at $53.63.

The strong action for JPMorgan's stock -- following a vote of confidence in CEO James Dimon by the company's shareholders on Tuesday -- ran counter to the broad market. The Dow Jones Industrial Average was down 0.5%, while the S&P 500 (SPX.X) and Nasdaq Composite saw declines of 1%.


In a strong bull market so far this year, one of the biggest questions for investors is when the Federal Reserve will finally pull back on its economic stimulus efforts, and how dramatically the central bank's policy will change. The Fed has kept the short-term federal funds rate in a range of zero to 0.25% since late 2008. Since September, the Fed has been expanding its balance sheet through net monthly purchases of $85 billion in long-term securities, in an effort to hold long-term rates down.

During testimony before the Joint Economic Committee of Congress, Bernanke on Wednesday repeated the stance of the Federal Open Market Committee (FOMC) which has said after recent meetings that assuming inflation was kept in check, the federal funds rate would stay in its current range at least until the U.S. unemployment rate remained above 6.5%.


"Recognizing the drawbacks of persistently low rates, the FOMC actively seeks economic conditions consistent with sustainably higher interest rates," Bernanke said. "Unfortunately, withdrawing policy accommodation at this juncture would be highly unlikely to produce such conditions. A premature tightening of monetary policy could lead interest rates to rise temporarily but would also carry a substantial risk of slowing or ending the economic recovery and causing inflation to fall further."

During a question-and-answer session with members of the congressional panel following his prepared testimony, Bernanke discussed the timing of a possible slowdown in securities purchases by the Federal Reserve. "If we see continued improvement and we have confidence that that's going to be sustained then we could in the next few meetings . . . take a step down in our pace of purchases," he said, according to a Reuters report. "If we do that it would not mean that we are automatically aiming toward a complete wind down. Rather we would be looking beyond that to see how the economy evolves and we could either raise or lower our pace of purchases going forward," he said.

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