March 20, 2014
SHOULD HAVE KEPT BEN:
Yellen Debut Rattles Markets : Wary Investors Seize on New Fed Chief's Mixed Message on Pace of Rate Increases (JON HILSENRATH and VICTORIA MCGRANE, March 19, 2014, WSJ)
Investors bristled after Janet Yellen emerged from her first meeting as Federal Reserve chairwoman with some unsettling signals about the central bank's outlook for short-term interest rates.The Fed intends to keep short-term rates near zero into next year, but investors sniffed out signs that rate increases might come a bit sooner and be a touch more aggressive than expected.
Appointing new chairmen precipitated the '87 market crash and the '08 credit crisis. They always have to hike rates to prove their bona fides to the inflation hawks, but doing so into the teeth of deflation is disastrous.
Posted by Orrin Judd at March 20, 2014 7:26 PM