Arab Today, arab today bernanke blasted after surprise notaper decision
Last Updated : GMT 04:07:37
Arab Today, arab today
Arab Today, arab today

Bernanke blasted after surprise no-taper decision

Arab Today, arab today

Arab Today, arab today Bernanke blasted after surprise no-taper decision

Washington - AFP

Economists and market analysts on Thursday blasted Federal Reserve chief Ben Bernanke after the Fed stunned markets with its unexpected decision to not cut its stimulus. Bernanke came under fire for having stoked nearly unanimous expectations that the Fed would announce the \"taper\" of its $85 billion a month bond-buying program after its policy meeting Wednesday. The decision cost investors who bet on a stimulus cutback hugely, though benefiting many with long positions in global stocks. Many blamed Bernanke and fellow members of the Federal Open Market Committee (FOMC) for having since May repeatedly suggested a September taper of the quantitative easing (QE) program. University of Michigan economist Justin Wolfers called the surprise \"the result of a needless miscommunication. \"This whole taper debate is one that should never have happened,\" he wrote. After Bernanke first spoke of a stimulus cut in May and June, \"taper-talk came to dominate the financial headlines, and a monetary meme was quickly born. The result... was that markets over-reacted,\" he said. \"Despite Bernanke\'s effort yesterday in the press conference to paint the FOMC decision as entirely consistent with earlier communication from the FOMC, it was not,\" said Chris Low at FTN Financial. \"The Fed may have done the right thing for the economy... but the Fed\'s communications credibility is shredded.\" Speaking after the FOMC announced its decision, Bernanke argued that all along he has stressed that any decision to taper had to be backed by data showing steady gains in the economy, especially \"continued improvements in the labor market.\" \"I think there\'s no alternative in making monetary policy but to communicate as clearly as possible, and that\'s what we try to do,\" he said. But Bernanke had not just pointed to a taper beginning late this year. The explicit details he provided fed the consensus that cuts were imminent. He said that QE should be wound up when unemployment falls to 7 percent, with the expectation that that will happen by mid-2014. FOMC members repeated those details in speeches, some emphasizing \"as early as September.\" When the unemployment rate fell in August to 7.3 percent, not far from the threshold and with no caution from the Fed, the die was cast, as far as markets were concerned. But the result was that interest rates shot up in expectation of tighter money conditions, apparently impacting economic activity, including home buying, something that Bernanke referred to when explaining the non-taper decision. \"The irony to all of this is that the backup in interest rates was due mainly to the chairman\'s May 22 comments,\" said economist Joseph LaVorgna of Deutsche Bank. He questioned whether financial conditions have really tightened, but added: \"If the Fed believes they did tighten, why did not the chairman or another Fed governor attempt to communicate this at some point\" to prevent markets from getting ahead of policy? \"We are worried that when the time comes to taper, and someday tighten, the Fed will not have the courage to follow-through on its actions because market expectations will likely be well ahead of where the Fed is. \" Many analysts still praised the decision itself, saying persistent weaknesses in the economy, and with a turbulent battle over government budgeting and debt ahead, require continued stimulus. \"The economy has not pulled away from its near two percent trend growth rate of recent years,\" said Ian Shepherdson, chief economist at Pantheon Macroeconomics. And most still expect the Fed to embark on trimming the bond buys in the near future. \"For now, we maintain the view that the Fed will taper in December. But much depends on developments in Washington and in the housing market,\" said Paul Edelstein, IHS Global Insight But at the same time, they said markets will doubt more than before anything they hear from Fed policy makers. \"It will be hard now to take seriously Fed officials\' speeches and testimonies,\" said Shepherdson. \"Yesterday\'s decision confirms that the real modus operandi of the FOMC is to base its view on the state of the economy on the latest backward-looking data.\"

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today bernanke blasted after surprise notaper decision Arab Today, arab today bernanke blasted after surprise notaper decision

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today bernanke blasted after surprise notaper decision Arab Today, arab today bernanke blasted after surprise notaper decision

 



Arab Today, arab today
Arab Today, arab today Youssra depended on colored foam

GMT 16:53 2017 Tuesday ,05 September

Youssra depended on colored foam
Arab Today, arab today EasyJet, Lufthansa among seven to bid

GMT 06:49 2017 Tuesday ,17 October

EasyJet, Lufthansa among seven to bid
Arab Today, arab today Etiquette expert underlines importance of gifts

GMT 17:52 2017 Sunday ,03 September

Etiquette expert underlines importance of gifts
Arab Today, arab today 3,250 people killed in Raqqa battle

GMT 03:49 2017 Wednesday ,18 October

3,250 people killed in Raqqa battle
Arab Today, arab today Iran's Facebook shuts down

GMT 23:50 2017 Monday ,16 October

Iran's Facebook shuts down
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Sidem reveals plan to improve education

GMT 15:52 2017 Friday ,06 October

Sidem reveals plan to improve education
Arab Today, arab today British actress becomes fifth woman

GMT 18:15 2017 Monday ,16 October

British actress becomes fifth woman
Arab Today, arab today Three killed, 360,000 without power

GMT 05:11 2017 Tuesday ,17 October

Three killed, 360,000 without power
Arab Today, arab today The history of solar eclipses

GMT 05:16 2017 Sunday ,20 August

The history of solar eclipses
Arab Today, arab today Mercedes says recalls 400,000 UK cars

GMT 06:56 2017 Tuesday ,17 October

Mercedes says recalls 400,000 UK cars
Arab Today, arab today Britain's Vauxhall to cut 400 jobs

GMT 10:53 2017 Sunday ,15 October

Britain's Vauxhall to cut 400 jobs
Arab Today, arab today Anoshka happy for reactions to her talk show

GMT 12:33 2017 Friday ,13 October

Anoshka happy for reactions to her talk show
Arab Today, arab today India to close colonial-era military farms

GMT 18:49 2017 Monday ,16 October

India to close colonial-era military farms

GMT 10:55 2017 Thursday ,12 October

Safaa Sultan happy for “Love School”

GMT 10:37 2017 Thursday ,12 October

Cara Delevingne accuses Weinstein

GMT 16:53 2017 Saturday ,02 September

Mai importance of gifts during Eid Al-Adha

GMT 12:02 2017 Saturday ,14 October

Conservation cutbacks put Brazil's

GMT 10:46 2017 Saturday ,05 August

Nanis reveals simple ideas for home renovation

GMT 12:25 2017 Saturday ,14 October

Squeeze on UK health gives advanced

GMT 07:02 2017 Sunday ,15 October

German minister sparks uproar

GMT 17:12 2017 Monday ,07 August

Al-Shawaifi reveals secrets of total solar eclipse

GMT 03:59 2017 Sunday ,15 October

US mobile carriers Sprint, T-Mobile to merge

GMT 11:37 2017 Saturday ,12 August

Fashion designer reveals her new collection
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday