Well, the Fed admits at last that things aren’t going as swimmingly as possible during Recovery Summer, and pledges to do more if more needs to be done.
Mostly, this will consist of buying more long-term Treasuries, but it might also consist of a more strongly worded statement about short-term rates staying low for a long time and a reduction in the interest rate the Fed pays on excess reserves.
What it won’t include is a raising of the inflation target, which the Fed has missed consistently on the downside for the past 2 years.
Central bankers around the world still seem petrified by non-existent inflation.
Helicopter Ben seems convinced that deflation isn’t a problem, but he also says that “central bankers alone can’t solve the world’s economic problems”.
Gorilla says: “Ben doesn’t think we’re Japan, but the jury’s still out!”
Tags: Ben Bernanke, Fed, US Economy