I can assure you that monetary policy makers are fully committed to acting as needed to withdraw on a timely basis the extraordinary support now being provided to the economy, and we are confident in our ability to do so.
On one hand, Tyler Durden at ZeroHedge is wondering about how the Fed may have to further expand its balance sheet to accommodate the pace of Treasury and Agency issuance.
On the other hand, John Taylor (of Taylor Rule fame) has voiced concerns over rising government debt. Scott Grannis at Calafia Beach Pundit is wondering if the Fed should *gasp* tighten as the steepness of the yield curve is signaling rising inflationary expectations.
We are all watching you, Ben
This video, which circulated at the time of Bernanke’s appointment, was hilarious at the time. Now, it doesn’t seem that funny anymore (though it’s unclear who would have done a significantly better job as the Fed chair).
Whatever the Fed does, the market isn’t going like the results. These circumstances can’t be bullish for equities.