Fed's Kohn: "I Want to Believe"
Obviously the Fed is the premier LOA practitioner in the country, as evidenced by these recent comments via still Fed Vice Chair Don Kohn. I sort of wish he'd STFU for a tad longer and just go already but his replacement will be exponentially more obnoxious so I'm OK with it for now. Seriously, shhhh, you're almost out, be quiet.
Keeping expectations of future price levels intact is vital, especially when interest rates are very low, the Federal Reserve's number two official said on Friday.
Fed Vice Chairman Donald Kohn also said that trying to counter asset price increases could increase volatility in inflation.
"Having inflation expectation anchored in this situation (zero interest rates) is really critical," Kohn said in a speech at an European Central Bank seminar honoring retiring ECB Vice-President Lucas Papademos.
"Risking unanchoring of expectation would be far too risky and far too costly. No one has done it and it is understandable why."
As in *winkwink* just make sure people believe in low inflation and so it shall be. Perhaps to remind the ECB that in the end, as long as the royal subjects THINK everything is cool, everything will be cool. So print, print, print, they're still buying it! For now.