The snow didn’t stop Ben. Blizzard or not, there were no stormy surprses in Fed Chairman Bernanke’s testimony today in Congress. Yes, the central bank was contemplating an exit strategy, but nothing was imminent.
“We have been working to ensure that we have the tools to reverse, at the appropriate time, the currently very high degree of monetary stimulus,” he said, according to prepared remarks. “We have full confidence that, when the time comes, we will be ready to do so.”
Daily Archives: February 10, 2010
REGULATION VS. REGULATION
Is the goal of avoiding the risk of “too big to fail” in regulating banks by keeping them smaller too improbable to work? Yes, according to Avinash Persaud of Intelligence Capital, a financial advisory firm. In a new essay posted today on Vox, he argues that policymakers should instead focus on making “the financial system less sensitive to the error in the markets’ estimate of risk…”
STAG + INFLATION?
No one’s talking about stagflation these days, and for good reason. Inflation expectations remain quite low in the U.S., although the outlook for prices has been rising over the past year, albeit from a depressed state. As such, the stag part of the equation–a stagnant economy–seems more likely, although one might think otherwise in the wake of the latest GDP report, which superficially looked quite strong. But there may be less to the top-line rise in GDP than it appears, as we discussed.