Is the Fed Now Dysfunctional Too?

Tim Iacono * Gold Seek A frightening prospect has developed in just the last week, that is, since the Federal Reserve surprised nearly everyone by announcing it would leave its $85 billion per month money printing effort intact: the nation’s central bank might now be as dysfunctional as Congress. Well, maybe not quite that dysfunctional, but headed in that direction. Markets expected at least a token reduction in the Fed’s asset purchase program, if for no other reason than that this policy seems to be inflating asset bubbles and doing the real economy little good. But, after making some bold pronouncements about “tapering” its bond purchases in the spring and saying little to dissuade anyone from that view over the summer, the Fed surprised markets by taking no action, raising more questions than it answered in their policy statement and during a press conference with Fed Chief Ben Bernanke last Wednesday.



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