On the Fed, the Journal’s Readers Deserve Better

J.D. Foster / August 13, 2009

The snarky aside is a common tool substituting for a sound argument. Sadly, a Wall Street Journal editorial today gave in to the temptation.

The subject was the announcement by the Federal Reserve that it would maintain its basic, highly accommodative monetary policy stance for “an extended period”. The Fed also announced it would suspend its special program to buy Treasury debt in an effort to create downward pressure on long-term interest rates.

There is a lot of debate in economic and financial circles as to whether the Fed has, again, gone too far in pumping liquidity into credit markets and whether Fed Chairman Bernanke’s so-called exit strategy reversing its extraordinary actions in recent months can or will work. These are reasonable questions, and a reasoned answer from the Journal would be welcome. (more…)