Tinker, taper


“HE’S already stayed a lot longer than he wanted.” Barack Obama’s remark in a TV interview this week fuelled speculation that Ben Bernanke, whose second term as Federal Reserve chairman expires early next year, would soon leave the central-banking game. As Mr Bernanke laboured to communicate the Fed’s goals to journalists on June 19th, after the close of its policymaking committee’s latest meeting, who could blame him for longing to return to academia?

Since the Fed’s main policy interest rate fell to near zero in December 2008 it has deployed a complex array of “unconventional policies” to boost the economy. The Federal Open Market Committee this week ostensibly kept its foot on the gas. It promised to keep adding $85 billion in bonds per month to a stash that has almost quadrupled to $3.4 trillion since the beginning of the recession. It also pledged to keep short-term interest rates near zero.


Link to Article