This is not Japan

June 20, 2012

Some have suggested the Fed should be more aggressive, even if it leads to higher inflation.  Bernanke has said in the past that Japan made this mistake, failing to respond forcefully to slow growth and deflation in the 1990s.  Our own Kim Schoenholtz addressed the issue today in an interview on CNBC following Bernanke’s press conference following the latest FOMC meeting.  A brief summary (lightly edited):

Maria Bartiromo:  Is the Fed out of bullets?

Kim Schoenholtz:  They’re not out, but they’re cautious about using their most powerful tools — and they should be.  This is not Japan.  There’s still a good chance they will respond aggressively in the coming months.

For the complete interview, see today’s Closing Bell (short video).

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: