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What's Behind the Market's Rise?

Posted on May 16, 2008

I saw an article in the Financial Times a few days ago about how the Fed is considering discarding Greenspan's philosophy of not targeting bubbles before they pop. That is probably a good idea, in my opinion. But if the Fed does change its view on its ability to identify bubbles, such a change in policy is unlikely to occur anytime soon.(As an aside, the thinking at the Fed has been that it is impossible to identify a bubble, that the proper response was to act only after the bubble burst, and even if they could identify bubbles, raising interest rates could damage the real economy. However...

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economy , fed , greenspan , inflation , interest rates , markets , the fed