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The Fed is against their will

Many people dream of success in their careers and come to occupy prominent positions. I also have those dreams, but today, I would not be in place by Bernanke, who once hoped to head the Fed, and now that dream is a nightmare.

And I would not be in place, because at every moment the economic situation facing touches becomes more complicated. At every turn, increased conflict must reconcile the poor Bernanke. And worse, the decisions that the Fed is taking, which he commands, are creating future headaches.

Why am I saying this? Because in addition to what we all see on a U.S. economy losing strength, and with an inflation rate upwards, the minutes from the last Fed meeting showed clearly in the panic that flies the highest monetary authority.

The pessimism of the Fed is also reflected in their macroeconomic projections. That's what I see in reducing growth projections for this year from the range 1.8% -2.5% to 1.3% -2% projected increase in unemployment from 5.2% and 5.3% and inflation forecast rose from 1.8% -2.1%, 2.1% -2.4%.

In the opinion of David Wyss, chief economist at Standard \u0026 Poor's clear that these do not end even pessimistic projections align with the market: "I think they are more pessimistic about their economic outlook than they were before, but are even more optimistic I ". Just as I suspected, Wyss also believes the U.S. economy already in recession.

But the danger of recession is even worse because inflation is threatening to tie the hands of the lead agency in the U.S. monetary policy According to the minutes, committee members agree that "keeping inflation expectations was essential" and this causes a dilemma.

What will the Fed from now on? To the President of the Dallas Federal Reserve, Robert McTeer, "I think the Fed can keep lowering interest rates"

My interpretation, based on what you can guess, is that the Fed will do what they do not want ... to continue the rate cut. Definitely go for an all or nothing, hoping the economy will recover as quickly as possible and hundred and eighty degree turn in policy rates and to retrace the way up but this time, at a faster rate than in the Greenspan era.

For members of the Fed, there remains no place for a gradual policy of fees, because they feel they are going in the opposite direction, driven by urgency.

Meanwhile, William Poole, president of the St. Louis Federal Reserve, who will leave office next March (will not be at the next meeting of the Fed's 18) does not want to be seen as a culprit of the problem of inflation.

In a speech in Kirksville, Missouri, Poole said that while the Fed must try to encourage the growth, it should not make the cost of letting inflation get out of control and causing havoc. Just the more sensitive the situation for the Fed, Poole made a statement which is more in favor of a rate hike, it really is a statement that does not help.

I understand that the Fed has before it a time bomb off thinking once it achieves the needed push to give the U.S. economy. This disturbs me because I have high expectations of economic recovery occurs in the short term and therefore perceive that we will hear more frequently than the word: stagflation.

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