The Bernanke monetary pledge

Bernanke and the Fed have pledged to hold rates low through mid-2013. This is similar to the pledge made by Bank of Canada Governor Mark Carney in 2009 and is consistent with the creditability school of central banking. An effective monetary policy is one that is clear, truthful, and creditable. The problem with Fed policy has been the language of "extended period of easing" is that it has no meaning without a definition of extended easing. That could be until December or it could be until mid 2012 or later. The Fed fund futures predicts whether next policy change will occur and it has been all over the map in what may be the expected to be the end of the easing policy. By providing specifics, the uncertainty is resolved and there has been a clear commitment to follow-through on a long-term strategy.

Now the issue is whether the market believes this "new" policy and is it enough to boost the economy.