Botching the Exit
The Fed’s blinking on tapering was due to their concern over the uptick in interest rates following Mr. Bernanke’s musings in June. While the markets soared on his back-peddling, there are reasons to worry. The economy is still weak despite trillions of stimuli. Today, even the Fed is addicted to low interest rates. And coming soon are the negotiations between the White House and Congress which could trigger a Federal shutdown next month. Ironically, none of this is going to give the economy a boost.
We believe that America botched the “exit” partly because nobody has tried it on this scale before….