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Former Dallas Federal Reserve V.P. Gerald O’Driscoll on the need for more clarity from the Federal Reserve about any further action they may take.
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Is that I have no idea that someone's heart if the Fed waging war on itself.
At the Fed's most recent meeting of the open market committee.
Members seemed ready for looser policy soon that came clear in those minutes but then -- fed hawk said that -- was stale.
And -- after another fat guy contradicted the hawk Bullard and and said we need new action.
And then this Friday.
Chairman Bernanke may try to iron out the Fed's muddled message when he gives his latest outlook in Jackson Hole Wyoming let's ask an expert but we finally get some clarity.
Gerald -- Driscoll former.
And Cato Institute senior fellow joins me now on the fox -- exclusive.
Thanks for being what -- -- well first of all.
Just -- an outsider I feel like this is the most of muddled message I've seen from the Fed even as it tries to be more transparent than any previous fed in history.
Am -- wrong about that.
Million -- I've never seen such a model.
And I don't know how you can say that the minutes of a meeting there are three weeks old are stale I mean nothing happened to those three weeks that was definitive.
Nor do I think anything definitive will happen in the next three weeks.
I think if they felt the way they seem to have felt they should have acted that then and not waited till September.
It seems like the Fed though even the guys who want to loosen up policy.
Are a little worried about the criticism that we'll get hit from the political sector saying that they're -- doing it did juice up the election for Obama -- that there -- You don't wasting our future on more debt making it -- but the rates too low for government to borrow do that the Fed guys ever think about these political ramifications are only looking at the economic numbers.
Now they think about the political implications and if they thought about it a little more clarity that a realized that.
The mid summer meeting was really the last meeting in which they should consider any kind of policy action new policy because.
To -- doing something the middle of September 2 months off from the election I don't know how it would not be interpreted politically.
In fact might it be interpreted politically such that the Fed will fail to act in September do you think that's a possibility that they don't do any.
Lucy -- see things in September.
If they failed active they're gonna be accused of kowtowing to -- -- Republican politics and not play act.
They do something aggressive.
Then they can be interpreted as you know we'll be accused of trying to help the president.
Now one way of interpreting -- comments.
Was he was trying to say don't do anything major but something modest is okay any -- what he may have had in mind.
And yet the economy is -- -- growth it's just kind of barely getting by it seems like doing a little tiny thing.
And the Fed same efforts at so far have resulted in almost no progress at all simply won't be enough well it.
No but look these -- rounds of quantitative easing don't have any permanent effects.
They they -- -- sugar -- in the financial markets there's a rally.
But you know we we've done to Hawaii the third gonna be different than the first two.
The problems of the economy have to do with the tax and regulatory cliffs.
That's clear when you read these reports business is afraid to hire buying bonds isn't gonna change that.
Right now.
So we got two things coming up -- got the big open market committee meeting in mid September but we have this fly fishing extravaganza.
In Jackson Hole Wyoming -- these fed guys get together and -- Do you think Bernanke is gonna continue the model when he makes his big address on Friday from there are do you think -- come out with some kind of new.
One since phrase that sends stocks soaring.
He may.
Bought he may not even his speech may not even beyond the near term economic outlook he could end up writing an academic paper and.
On a long term issue and -- -- totally avoid the topic.
That would not surprise me.
-- man and that will be so disappoint Wall Street -- a tantrum when the Fed.
Let them down.
Might it be -- that instead of waiting for the Fed we're gonna have to turn for solace to the European Central Bank -- -- to the central bank of China that we need some other central bank and some other big economy that also is dormant.
To step in here and do something -- loose.
It's hard for any other Central Bank.
To move the US economy we could move the world but not the other way around.
I like that we can move the world.
But not the other way around you know what European Central Bank in -- -- the bank you keep that in mind all right thank you so much for being with us tonight we appreciate it.
Happy to be okay.
