Bernanke Says Fed Can Remove ‘Punch Bowl,’ Curb Inflation - Bloomberg
"Federal Reserve Chairman Ben S. Bernanke sought to assure lawmakers
the Fed can limit inflation while providing record stimulus and won’t
allow consumer prices to rise in return for faster economic growth.
“It will be a similar pattern to what we’ve seen in previous episodes
where the Fed cut rates, provided support for the recovery, and when
the recovery reached a point of takeoff where it could support itself on
its own, then the Fed pulled back, took away the punch bowl,” Bernanke
told the House Financial Services Committee today in Washington."
...Maybe. And putting aside his sterling prediction about how bad the
bust in house prices would become, in the past the US didn't have a
debt/gdp ratio that exists today...if the fed takes away the punchbowl,
what happens to debt service? Remember our fed chairmen have also been
critical of what Japan was doing, but it didn't stop them doing
basically the same...
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