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The Fed speaks

Thumbnail image for bernankefomc.JPGThe Fed -- or at least the Federal Open Market Committee -- has spoken, and the new regime will be the same as the old regime. That is to say, interest rates will remain unchanged, and the Fed will keep a big balance sheet. As this is the Fed, not doing less is interpreted as being willing to do more, and so the stock market jumped on news that our monetary policymakers are attuned to the weakening economy and apparently willing to step in if things get worse.

"What we’re left to wonder," writes Matt Yglesias, " is would this have gone down differently if Barack Obama’s three nominees were in place? And if it would have, how different would the midterms look? This is the biggest political story of the week by far, and you’ll see virtually no coverage of it."

Photo credit: Mahmood Fazal/Bloomber.

By Ezra Klein  |  August 10, 2010; 3:36 PM ET
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Isn't it great that the media runs cover for the GOP obstructionists?

Posted by: bdballard | August 10, 2010 5:08 PM | Report abuse

What I don't understand is why the Ben Bernanke running the Fed seems to not be the same Ben Bernanke that wrote all those great papers about what to do if you're running the Fed. Just look at his papers on and ask yourself, "How is this the same person?"

He spent his entire academic career explaining what should happen in this exact moment. Not only did it happen, he happened to be the guy in charge when it did! Yet, what does he do? Apparently look at his own papers and say, "Meh."

Posted by: nylund | August 10, 2010 6:59 PM | Report abuse

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