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-- investors were particularly spooked by Ben Bernanke today Fed Chairman Ben Bernanke did his best to put off any talk of slowly -- -- tapering -- purchases to keep interest rates down.
But yesterday on Fox Business Kansas City fed president Esther George was crystal clear that she thought tapering bond purchases should begin as soon as.
I think it is time to begin to adjust those purchases.
The labor market has shown now four of the last six months -- pretty steady gains of close to 200000 per month that is a good indicator that there has been sustained improvement here.
So who's got -- -- from the perspective of former fed governor Wayne Angel let's ask him now weighing.
-- -- -- -- -- Well ask -- George and it is your right.
Are there just no question -- want.
Ally and it and brought Ben Bernanke understand attempting.
To get more long term investment by -- -- Bob -- pushing long term interest rates down.
By buying thirty -- glaciers and all they succeeded in doing.
Is it piling up a huge loss.
On the Fed's balance sheet well -- -- -- Michelle.
-- -- today they've they've they did not mark to market.
That treasury so our.
-- -- -- -- -- -- -- Disastrous thing -- because the last time you were -- you were heaping praises on Ben Bernanke saying you've been doing a pretty good job.
When it comes though to this point of disagreement when to begin tapering on that.
You -- clearly and -- Georgia's side and not on Ben Bernanke's.
All right well what happens now do you think she's just a voice screaming in the wilderness because -- so many other fed governors.
That are in favor of continuing to do.
Business as usual for a while to -- Well what happens -- the Fed continues.
To have -- huge.
Interest rate that.
By owning long term governments.
At every bond fund that's on long term governments has taken -- -- on its balance sheet.
And have devastated me yet and it must be a hundred billion dollar loss while that they've been accumulating bonds a did not market to the market so they've heard -- I -- doesn't exist.
Well when they do have to market to the market do you think they will end up breaking even or continue with this loss.
Aren't they are continuing the loss.
-- -- what happens then is that the point at which the prices paid for all this money burning.
That's correct and what will that price be -- Is is not afraid -- out.
It worldly I'm not a successful policy.
And that really doing nothing about improving.
Economic growth doing nothing about price stability.
And I would just like -- the -- to burst -- price stability.
And -- -- -- to have a really even key role.
-- tapering back -- had somebody in the market forces work because -- abortions will work.
And they'll do a lot and the -- on the other.
Policy that's what you just -- what Ben Bernanke's been doing.
That's correct -- that's that's pretty strong language now in it what's gonna happen for example.
To interest rates are we gonna see interest rates skyrocket -- what.
Well long term interest rates have shown the way we've had long term interest rates -- moved up from.
For about two point eight Ted now about three point eight so we've got analysts extreme -- -- -- long term interest rates.
And the -- -- betting -- to do any about it.
And instead it takes a loss on the value of -- securities.
And says they won't ever Marcum to the market.
It is -- over a live from the securities.
They -- -- -- less than they could have learned.
Earned on their -- -- Well of course interest rate we should mention the interest rates did come down a little bit today based on what Ben Bernanke -- said but we've seen a spike over the past two months.
Up to 2.5 percent from way down one point six all right bottom line question we got to and it -- this morning.
The Fed has been focused on the stock market they even have that PR campaign a couple of weeks ago when they sent -- always fed presidents and governor -- to talk up the market.
However as we -- with American Express which -- just reporting numbers today.
A market price will go up when they fire people that's that's a contradiction.
To their mandate.
To keep employment.
-- isn't it I mean are at -- fundamental well in a contradiction here policies.
And no they certainly have -- wrong the wrong policy -- And the -- toolbox that is that policy they should I have this.
Price stability if they -- price develop date.
I'm -- will work it's wonders.
To get more employment growth than they would get by pursuing employment.
Well they also have an unemployment mandate besides price stability and again sometimes when they're trying to keep stock prices up.
That bears -- there is a real conflict of interest between -- unemployment mandate and keeping stock prices up would you not agree.
Well what I understand that contact.
But I've always believed him in my term of office at the bad.
I always pursued -- develop any.
And no warning that if we get a good job impression about what date that -- -- that would or would be a better than -- word.
Every try to dare you get -- employment and.
Wayne Angell we got to leave it at that but -- unsuccessful policy that's what he is calling Ben Bernanke's.
Pursuit of a stronger economy thank you very much -- appreciate it.
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