Market.view | The Fed keeps its head | Economist.com
Well, the Economist thinks he's ok....
"It is not the Fed’s job to shield financial actors from risk, and Mr Bernanke no doubt realises that his credibility is at stake. If a quick rate-cut touched off a renewed episode of inflation, it would be difficult for the Fed to rapidly reverse course. Mr Bernanke must also be acutely sensitive to the common criticism that his predecessor, Alan Greenspan, overshot the mark by dropping the federal funds rate to 1% in the wake of the downturn of 2001, thereby encouraging the markets into a renewed phase of exuberance. Mr Bernanke is well aware of the hats that belong to him and the ones that do not. If broader indicators begin to show weakness spreading throughout the economy, then the Fed may act to ease a forthcoming downturn. But do not expect Mr Bernanke to bend to the demands of overextended investors suffering through short-run volatility. As the chairman knows well, he must always keep a cool head even as others lose their shirts."
The article's gist is he kept his cool, did what he had to do to alleviate the noise, and with the long view in mind, just might NOT drop the federal funds rate in September.
Quote:
Linear Mode
