Sunday, June 11, 2006

Bernanke in danger of establishing a reputation for muddle.(BUSINESS)

Give me a break. I think that Bernanke is establishing a reputation for sharing his thoughts to a greater degree than Greenspan, and I find it welcome.

There is a difference between uncertainty and confusion. One of the tasks of any monetary authority is to maintain a sense of uncertainty in financial markets, for it is that uncertainty that creates room for the central bank to manoeuvre.
To achieve impact it needs to be able to surprise. But it should not surprise the markets unless it intends to do so. If it seems to be stumbling around, unintentionally surprising the markets, it just creates confusion. Central banks need the markets to think they know ...

Link: Bernanke in danger of establishing a reputation for muddle

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