[lbo-talk] FOMC

Doug Henwood dhenwood at panix.com
Wed Mar 29 08:35:22 PST 2006


Jim Devine wrote:


>Doesn't Gentle Ben have to prove (in the eyes of "Wall Street") that
>he's no wimp compared to Al?

To some degree - hawks still worry about his helicopter money remark during the deflation scare of 2002. (I'm doing this from memory, but after he said something about how the Fed could pump enough money into the economy to avoid a deflation, he was asked how - and alluding to a famous comment by Milton Friedman, he answered, by dropping it from helicopters.) But most Wall Streeters want the Fed to stop tightening after the next FOMC meeting; they're not worried about inflation, and fear the contractionary effects of higher rates.

Doug



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