Fed considered extreme measures

[edickens]

Yes, greater transparency is the mantra of neo-liberal financial reform.  The Fed
usually presents arguments for greater flexibility (and thus less transparency)
for the sake of easing; but when the archives open we usually find that their
real concern was for how to tighten.  The official word is that they are
investigating the kinds of things everyone keeps telling the Bank of Japan to
try:  Direct intervention in the FX market, "operation-twist" style purchases of
long-dated bonds, saturation of the market with reserves, writing options on
long-term interest rates, etc.

Tom Dickens

Doug Henwood wrote:


> edickens wrote:
>
> >  >From the perspective of the historical preoccupations of central bankers,
> >the FOMC blundered by getting locked into a transparent monetary policy.
> >This is yet more floundering around trying to find a way out--a task that
> >will be become urgent the next time the FOMC's international concerns come
> >into conflict with its domestic ones.
>
> But transparency's the thing everywhere, not just at the Fed. The
> markets and the press are constantly complaining about the ECB's lack
> of clarity.
>
> They could buy stock or junk bonds without telling us, couldn't they?
> We don't half the rescues they undertake, I'm guessing. So what about
> the possibility that this was an attempt to reactivate the Greenspan
> put, to keep the recovery from derailing?
>
> Doug