Friday, August 31, 2007

Bernanke's Put-etto

In Ben Bernanke's much anticipated speech today in Jackson Hole, he essentially absolved the Fed of responsibility for protecting market participants from bad financial decisions, emphasizing vigilance yet patience and allowing others to make policy decisions that should relieve pressure on the economy's best friend: the US consumer.

Equity markets liked the speech, even though the market expectation for Fed rate cuts this year has been tempered. Unlike his predecessor, who was famous for swiftly cutting rates to ensure liquidity, Bernanke seems to be content biding his time despite some implicit pleading by others.

Of course this positive market action could just be month-end (and quarter-end for some broker-dealers) window dressing....

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