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Grading the Current Fed

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The American magazine has the thoughts of five monetary policy think-tankers regarding the Fed’s recent policy decisions. It is interesting to read the thoughts of experts who are relatively split in their opinion of the Fed. I side with Allan Meltzer, political economy professor at Carnegie Mellon University, who gives them a “C or C-” saying:

The Fed has two responsibilities. Monetary policy should be conducted to maintain economic and price stability.

[…]

Monetary policy is too lax at present. The Fed has done too much to prevent a possible recession and too little to prevent another round of inflation. Its mistake comes from responding to pressure from Congress and the financial markets. The Fed has sacrificed its independence by yielding to that pressure.

I could not agree more.

(via Real Clear Markets)

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Written by walonline

March 28, 2008 at 8:41 am

Posted in Regulation

Tagged with ,

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