« Don't Leave Me Hanging, Greenspan | Main | Death by Seth.... »

Feb 2
Bernanke First Fed Move...Wait
MidMarketMaven, while a fan of former Fed Chairman Greenspan didn't appreciate his 11th hour increase of interest rates:

"I think Fed Chairman Greenspan's swan song, a quarter point hike in the Fed Funds rate, was a mistake. Enough already! Uncle!

With housing starts slowing, the GDP slowing and with last year's wage increase the lowest in percentage terms since 1996, I would suggest that there was no need for a rate increase, which only means that the odds of further deceleration in the economy increased today with the superfluous rate increase."

I agree with MMM, he is not an economist (neither am I).   I also agreed with him on his point about Greenspan's last rate change.  I cannot make a persuasive economic argument like MMM but I considered the Greenspan's move from a leadership and transition stand point.

Making significant decisions on the eve of a leadership change isn't good form.  In this case it probably forces Bernanke to sit on his hands and wait for a crisis as Greenspan tightened one last time - "Uncle."   Bernanke may not have a chance to make some small moves before he faces more significant challenges. His ability to lead out of the gate was weakened by Greenspan's final call.

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