Bernanke the steamroller
Comment on today’s Federal Reserve policy decision today, which among other things, included the extremely unusual statement that they’re likely to leave interest rates close to 0 through mid-2013, from Ricardo Perli of ISI, a very mainstream Wall Street research operation:
For the first time in a long time, there were three dissents – Fisher (Dallas), Kocherlakota (Minneapolis), and Plosser (Philadelphia). Up to now, FOMC chairmen strived to avoid more than two dissents. The fact that this long-standing practice was disregarded means that Bernanke is becoming more determined to push through what in his view are the appropriate policy moves. We would expect the influence of the hawkish minority to diminish as a result.
Bernanke is very concerned about economic weakness and wants the Fed to do everything it can to stimulate a return to growth. The release is full of unusual mentions of their “dual mandate,” meaning boosting employment as well as keeping down inflation. This is not William Greider’s Fed.