January 25, 2012

Bernanke continues to put incremental stamp on Fed

First, with inflation hawks like Richard Fisher now off the Federal Reserve's policy board, Fed Chairman Ben Bernanke can stop worrying about their hyperfears about nonexistent hyperinflation.

So, he can also say interest rates will stay near zero, albeit indicating he expects recovery to be slow.

More importantly, in a sense, is this increased transparency:
In a separate set of statements, the Fed said that 11 of the 17 members of the committee expected that the Fed would raise interest rates at the end of that period. It noted that the committee expects growth to accelerate over the next three years, from a maximum pace of 2.7 percent this year to a maximum pace of 3.2 percent next year and up to 4 percent in 2014. 
Alan Greenspan never would have even considered making such an announcement.

Instead, he would have kept inner workings of the Fed secret, mumbled some shit-in-one-hand, St. Alan of Greenspan oracularity to Congress on the other and pretended he knew what he meant.

Of course, Bernanke has prodded Congress to do more for the economy than it has. That's not happening, at the earliest, before most Congressional GOP primary races are out of the way, and even after that, is likely to still have a fair degree of GOP BS, only a shade or two lighter on tea party dogma.

But, without getting specific, Big Ben said the Fed will consider more stimulus moves if necessary. Again, having the likes of Fisher out of the way  helps.

But, not so good news from the Fed for Dear Leader. The unemployment rate is only expected to drop to 8.2 percent during the year. I'm sure Obama would feel better, even with Richie Rich Romney or Newt-bar Gingrich as his opponent, if it were below 8.0.

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