Hope exists in the form of expectations that Chairman Bernanke will do something to boost the impact of monetary policy. Nothing will actually be done at the Jackson Hole meeting. The only hope would be in the form of a phrase or statement, and we found out that this hope will not be realized.
The speech was more focused on the the impact of fiscal headwinds and fiscal sustainability as not being incompatible. This is the problem that needs to be solved not a change in monetary policy.
Bernanke did not take any major action and defended its August 9th decision to continue the low interest rate policy. He also said that he would increase the FOMC committee meeting to two days from its original one to allow for further discussion. That type of talk is not moving out on a limb.
Many want a more aggressive Fed that will increase inflation. They argue that the Fed is dominated by the creditor class through Fed bank president chosen by banks within their district. Hence there will be less active action on this front. It is an odd argument given the history of currency and credit debasement by the Fed over history, but it is the one that is in fashion at this point by those who want aggression.
We did not get a clear message from the Fed and this should be a market worry.
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