Reply #22: All Hail Ben!!! When do they start with the Goldilocks talk of just the

[54anickel]

right amount of growth slowdown to tame inflation without a recession? We're headed for a soft landing. Cheers for Ben! Ruh-rah! Hurrah!

I'm still betting a hands off approach until after the November elections. They'll fiddle with the inflation numbers to get through it. Funny how the numbers suddenly start to support the Fed's decision. Quite a turn around in one week.

Here's one from August 9th - yeah I know that was then, things are different now. :eyes:


http://www.iht.com/articles/2006/08/09/business/fed.php
Will Fed manage a 'soft landing' again?

The suspension of the Federal Reserve's two-year campaign of raising interest rates is temporary, analysts said, casting doubt on the hope that a modest economic slowdown can subdue inflation on its own.

After 17 consecutive increases at each meeting since June 2004, the central bank voted Tuesday to hold its benchmark interest rate steady at 5.25 percent. Policymakers suggested that they wanted more time to see where the U.S. economy is headed before deciding if more increases are necessary.

The policy shift amounts to a bet by the Federal Reserve's new chairman, Ben Bernanke, on one of the most elusive goals in monetary policy - a "soft landing," in which the economy slows just enough to cool off spending and ease inflationary pressures but not enough to cause a big jump in unemployment.

But experts say inflation data could prompt the Fed to begin raising rates again soon, despite the risk that aggressive credit tightening could tip the economy into recession. In practice, the Fed has effectively engineered only one other "soft landing" in history - in 1994 and 1995, under the chairmanship of Alan Greenspan.

Conditions then were in many ways more benign than they are today, however. Inflation was heading down, not up; the federal budget was moving toward lower rather than higher deficits; energy prices were erratic, but far lower than they are now.

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