Fed's will, not mechanics, is the issue

Good op-ed piece by Ben Bernanke on the Fed's exit strategy. The piece does a good job about describing what would be the mechanics to decrease the balance sheet. What it does not do is tell us that the Fed has the will to use the power to exit and under what conditions the Fed will start to exit the credit markets and reduce its balance sheet. 

The issue of rising interest rates and inflation fear is not about mechanics but about creditability. This is the same issue that was at the heart of the Volcker era. We know how to cut money to stop inflation. We also know that there will be a real economic cost from cutting the money supply. The issue during the inflation period was whether the Fed was creditable at being able to tame inflation. The creditability gap took years to solve. The slow decent of interest rates even with inflation at lower levels was a direct result of creditability problems at the Fed. 

You can talk all you want about the Fed and how action will be taken to reverse the growth of the balance sheet, but the real issue is whether Bernanke or any new Fed chairman will have the courage to reverse monetary ease when a strong recovery begins. Will Bernanke under any conditions exit the monetary stimulus before a reappointment? I think not. Would a new appointee be willing to show independence? I think not. We are a long time away from any Fed action, but the crux is the creditability of Fed independence. All of the other issues of mechanics is noise.