FOMC Chairman clearly focused on near term economic recovery-Is your portfolio prepared?

 Ben Bernanke on Tuesday soothed market concerns that the US Federal Reserve will cut short its asset purchases before the labor market improves.

 Bernanke’s dovish testimony to the Senate banking committee clarified the Fed’s public stance after minutes of its recent meetings showed that “many” members of the rate-setting Federal Open Market Committee were worried about the costs and risks associated with its third round of quantitative easing, or QE3.

 The chairman said he took “very seriously” the risk that a prolonged period of low interest rates could damage financial stability, but argued that cheap money lowered risk in other ways.  Two examples he cited were:  by encouraging firms to rely more on longer-term funding, and by reducing debt service costs for households and businesses.

 The Chairman sounded cautiously optimistic on the US economy citing expanding growth, but he warned that the looming sequestration, or automatic spending cuts, scheduled to take place on Friday could hurt the economy.