Boston Fed's Rosengren Has Been Bonked with the Deflation Stick

Tuesday, July 13, 2010 , 0 Comments



The Federal Reserve would be able to lower borrowing costs further if the economy weakens considerably by reinvesting maturing mortgage debt it owns or boosting asset purchases, Boston Fed President Eric Rosengren said.

In an interview with the Wall Street Journal published on Tuesday, Rosengren said the Fed had not run out of ammunition just because official interest rates are now at zero.

"There are several policy options if we think the economy is weaker than we would like," he was quoted as saying.

Here's what I want to know: When did this become OK? In a different life, the Fed existed as behind-the-scenes puppetmaster. Now they are right out there in the open saying if things don't look up (while telling us things are looking up), they'll be buying more crap to get things looking up.

That's not how this works, boys, come on now...

By the way, if Rosengren happens to see this I have to be honest... I'm auditioning for a new least favorite Fedhead now that Janet Yellen is headed to the Board. I'm looking for a raging monetarist who enjoys asset purchases, easy money and of course ignoring the obvious. If this sounds like you, get in touch.

Jr Deputy Accountant

Some say he’s half man half fish, others say he’s more of a seventy/thirty split. Either way he’s a fishy bastard.