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Gerald O’Driscoll, former Dallas Fed VP and economic advisor, weighs in on Ben Bernanke’s speech this morning and the market reaction to the decis...
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Right to have fed chief Ben Bernanke.
Saying once again at the Fed's annual summit in Jackson Hole Wyoming that the Central Bank stands ready to act and we'll provide additional accommodation as needed to promote a stronger economic recovery and helped boost the labor market.
Our next guest says though that further fed stimulus will be nothing more than a sugar rush to the economy and the markets former Dallas fed might -- Cato Institute senior fellow.
Gerald -- Driscoll joins us now thanks for being with us.
Did you look at that Bernanke's speech this morning do you think that stops being up a 124 on the Dow are overreacting to it.
Yeah hi Ed because -- I didn't think he's had anything new which is.
Sort of what I expected the Fed stands ready to repeat for third time what hasn't worked and kindness.
And that's why -- say it's just to sugar rush for the financial markets.
What ails this economy is not something the Fed can do anything about.
Can even fixing yet we'll never know how much worse it might have been had the Fed not.
Expanded its -- balance sheet by some two trillion dollars do you think that it is literally had no effect whatsoever of the Fed could have done nothing here.
No I look when and whether the financial markets seized up after the Lehman failure at the end of -- full and tangible way the Fed's injection liquidity was appropriate because we had a liquidity problem.
We do not have a liquidity problem in this country.
Yeah now if you feel like even if the Fed were to ease up some more here -- they can't afford to do a drastic action right because it will be seen as too political for the election that.
OK yeah and I I think -- boxed themselves in a case of their pockets -- it than it was so big big big can't do a whole lot.
We'll tell me though in a perfect world what would work to get this economy going again what could the Fed do.
The Fed what what would work is not something the Fed controls we need.
More certainty on the tax code we don't know what next year's tax code is going to be.
We need their -- -- regulatory cliff which people know there's a whole raft of regulations waiting to be issued after the election.
And there's a lot of anti business rhetoric -- a businessman I talk to just don't want to make a commitment.
While a whole bunch of things that are just beyond the control.
Of the Fed which may not stop them from doing something in mid September anyway all right thanks a bit -- have to -- really continuing general.
