Each day, Benzinga takes a look back at a notable market-related moment that occurred on this date.
What Happened? On March 28, 2007, Federal Reserve Chairman Ben Bernanke assured Congress that the U.S. housing crisis “is likely to be contained.”
Where The Market Was: The Dow finished the day at 12,300.36. The S&P 500 finished at 1,417.23. Today, the Dow is trading at 23,857.71 and the S&P 500 is trading at 2,612.62.
What Else Was Going On In The World? In 2007, Apple, Inc. AAPL released the very first iPhone. Major League Baseball published the Mitchell Report, a document detailing the widespread use of anabolic steroids among MLB players. A gallon of gas cost $3.38.
Ominous Words: Bernanke’s quantitative easing programs were ultimately responsible for helping the U.S. get back on track after the worst of the housing-fueled financial crisis of 2008 and 2009, but his infamous speech highlights just how unprepared even the top economists in the country were at the time.
Bernanke detailed the early-stage turmoil in the subprime mortgage market to Congress, telling them that delinquency rates have climbed sharply in recent months, resulting in a tightening of the credit market.
“The ongoing tightening of lending standards, although an appropriate market response, will reduce somewhat the effective demand for housing, and foreclosed properties will add to the inventories of unsold homes,” Bernanke said. “At this juncture, however, the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained.”
The housing market continued to deteriorate in the months that followed, and the S&P 500 plummeted 42.4% in the two years that followed.
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