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2013/09/22: COMMENTARY: Is Bernanke’s Flub Yellen’s Drub?

September 22, 2013 Leave a comment

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COMMENTARY: Sunday, September 22, 2013, 16:30 CDT

[The Weekly Calendar is also already available via the link in the right-hand column.]

While many folks thought it just fine that the Mr. Bernanke’s FOMC left the much anticipated QE ’taper’ for another day last Wednesday, that delay does raise certain issues. And while we have many more to be covered shortly in another post, one of the most critical in our mind is the degree to which this will be a burden on Mr. Bernanke’s successor. And that’s not some esoteric consideration for a far future date: the man is stepping down in January after all.

YELLENspeaking-130921And one of the key aspects we noted in our assessment of what transpired Wednesday was clear even from the title of our Thursday post “Taper to come under Yellen, so Mr. B. spikes the punchbowl.” There’s probably something to be said for passing along the potential pain of a risky action to your successor.  But just as it was with the lack of any rate increase at the end of Greenspan era (when one was so obviously in order), this is turning this into regular (if very broadly spaced) style at the Fed.

Maybe it is just a matter of leaving their successor some latitude to demonstrate their mettle

Read more…

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