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Today Federal Reserve Chairman Ben Bernanke stated the central bank is prepared to shore up the US economy with “nonconventional” policies. Tech stocks rose in the wake of the news, while bank stocks and treasuries slumped.

At a much-anticipated speech at a conference on monetary policy in Boston, Bernanke acknowledged the limitation of the US Treasury to set the nominal interest rate below 0%, and indicated the economy still needs support.

“Given the committee’s objectives, there would appear, all else being equal, to be a case for further action,” he said.

Despite an unexpected drop in consumer confidence, Bernanke speech, combined with several positive economic indicators on Friday – including a better-than-expected uptick in retail sales – creating a modest rally in tech stocks on Wall Street.  Meanwhile, gains were tempered by losses in the banking sector, and treasuries slid in value after the announcement.

While stock rallies can mean a rise in mortgage rates, Bernanke’s comments indicated an expectation that the economy may be struggling for some time to come. We’ll be watching the markets closely to keep you abreast of their effects on mortgage interest rates!

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