The Fed and the Stock Market

http://www.futureofcapitalism.com/2010/11/the-fed-and-the-stock-market

From a New York Times news article about the Federal Reserve and the dollar:

the Fed's new vice chairwoman, Janet L. Yellen...said she was "not happy to see us caught up in a political debate."

Right. Heaven forfend that the dollar or the Federal Reserve actually become the subject of a political debate! The Times (nor the Wall Street Journal, which interviewed her) doesn't ask her why she opposes such a debate. Does she think that the American public is too stupid or unsophisticated to engage in it? Is she afraid of losing it? Are there any other subjects that involve trillions of dollars of money and a government institution with important effects on the economy that should be outside of political debate?

More:

Mr. Dudley argued that the Fed's efforts had their intended effect. Since August, when the Fed first hinted that it might take further steps to spur the recovery, stock prices have risen and long-term interest rates have fallen. That makes it easier for consumers to buy homes or refinance mortgages, and for businesses to borrow and invest.

"You've seen a significant easing of financial conditions over that time period," he said. "I have to believe that the expectation of a second large-scale asset purchase program was the primary driver of those changes."

Yeah, not like there was any kind of election that happened in that time period or anything.

by Ira Stoll  |  Nov 16, 2010 at 10:02 am Related Topics:  Federal Reserve, Politics receive the latest by email: subscribe to the free futureofcapitalism.com mailing list