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Saturday, December 21, 2013

Fed Still Has No Rules

Bernanke Gets Taper Call Right But the Fed Still Has No Rules

By Larry Kudlow - December 21, 2013

So Fed chairman Ben Bernanke finally pulled the taper trigger this week. And it was the right thing to do.

Stocks soared. And even with some back-and-forthing, gold, commodity indexes, and the dollar were basically stable. In other words, financial markets approved -- especially stocks, where investors believe Bernanke is telling them the economy is strong enough to weather a pullback in Fed bond buying. Actually, if the Fed shaves $10 billion in bond purchases at each of its next seven meetings, QE3 will end in October 2014 -- or perhaps sooner if the economy holds up.

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