The latest Bloomberg Businessweek notes concern that Federal Reserve chairman Ben Bernanke “may be boxing himself in” in his approach to boosting the American economy:
By all but ruling out another cycle of bond purchases in recent statements, Fed officials have left themselves with few options to counter the slowing growth and rising unemployment of the past few months. This raises the risk that the U.S. recovery will remain, as Bernanke himself has said, “frustratingly” sluggish.
Fed officials are betting that the slowdown will prove short-lived, removing the need for further action. The thinking is that growth will pick up from July through December as the shocks from Japan’s earthquake and an oil-price surge fade. …
The danger is that, once again, such forecasts will prove too optimistic.
Bernanke’s woes are no surprise to Roy Cordato, who wrote last week:
[A]pparently, the head of the the nation’s money-creating machine — as opposed to wealth-creating machine — Ben Bernanke, can’t figure out why his loose-money policies haven’t worked to stimulate the economy.
As Roy wrote in the title of that blog entry, “there was no other possibility” than failure of loose-money schemes.
