The Fed's credibility is at stake

Tom McKay

The Fed's credibility is at stake. The one thing Chairman Ben Bernanke must not do is talk the taper for next month unless he is positive he can walk the taper when the time comes. The Fed's credibility is at stake, especially because it relies on forward guidance as a policy tool. Bernanke started laying the groundwork for scaling back bond buying in May. At his news conference in June, he offered a timeline: If the data are consistent with the Fed's forecast, tapering could start later this year. In September, he balked. Forward guidance is only as good as the ability to follow through. Don't cry wolf Ben. Read more (VIEW LINK)


About this contributor

Tom McKay

Tom McKay

Managing Director and Co-Founder, Livewire

I'm the Managing Director and Co-Founder of Livewire. I'm passionate about collecting and curating the markets most informed insights every day so that our members can discover new investment ideas. If you would like to get in touch - please use...

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Medium 0 5fq3tiu9tgwnb 3vb7ktteu6kzfrwl3vfahytedn7orinz9sddxdfhmzyv7xhnh9k290mf1c4cmt

Hock Meng Tay

Thanks. Hopefully, it is the beginning of market rationalization in 2014.

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Livewire Equities

I think it is the start but it is going to be a long slow process. Reaction on the market suggests businesses, investors and consumers are welcoming the removal of intervention.

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Tom McKay

Good call and thankfully they followed your advice.

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Hock Meng Tay

It's time for the US Fed to seriously consider tapering as too much froth in the markets could pose a risk in the future. The Fed does not want to over stimulate the stock markets, and benefits do not flow over to the overall economy.

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