the fed has done exactly what the mkt has demanded at least the last 10 years straight without question.
The Fed is now in a bind. Rates can no longer go lower and printing is the only way they can stimulate. My guess is they will keep printing until the currency markets or gold forces them to take another path.
Technically, Fed need not raise the interest rate. They could simply scoop up longer-term Treasuries and it would have the same wonderful effect. But ure spot on about Fed giving into market demands for the last 20 years. It really knows how to blow, that's for sure.
in 2000 greenspan kept raising rates, raising rates 50-basis at a whack. everyone screamed overdone. greenspan ignored. each time Dow would drop -200pts to -300pts while Nazz would rally +200pts to +300pts at same time. then 2001 arrived. raised rates were overcooked. Jan 2001 and Apr 2001 greenspan cut -50 basis unannounced into live market action. open shorts were not happy. mm careers were ended in mere seconds
I think if they were planning an expansion of QE in 2010, they would not have reiterated today the expiration dates of the existing QE programs.
I don't know what your point is exactly but I concur that Fed's action is ALWAYS too little too late. Greenspan triumphantly declared "irrational exuberance" campaign but raised little to none of the interest rate. When the tech bubble popped, he dickered around too long before his now-infamous "surprise! surprise!" non-FOMC 50bp rate cut. (Needless to say, I lost a fortune on that day.) Then he resisted raising the interest rate until the housing bubble was already firmly established. How fitting to consider him the panacea of all things economics. Bernanke is no exception, only worse in my opinion.
Why do you think Ben is worse? I like him waaaay more than Greenspan. At the very least you have to throw Ben a bone for dealing with those committee twits in DC every few months...
Well, yeah, he knows the game all too well. Unfortunately, on a more substantive level, had he and his cronies took drastic action by regulating the money flow before the housing bubble popped in our faces, maybe we wouldn't even be here--or at least it wouldn't be so dire of a consequence. But what happens in the end? Only the Wall Street fat cats come out alive while the rest of us get creamed. I don't know if Greenspan would have taken the proactive measure to protect the idiots who brand themselves as "too big to fail". If I'm not mistaken, he actually thought that was a bad idea when Uncle Bernie implemented a rescue package. Of course, we shouldn't forget that this was in fact Greenspan-induced recession.