In last night’s blog post, “meek” is how I characterized the voting members (the majority that is) of today’s Fed. Nevertheless, I suggested then, and this morning on television, that they’d taper a modest amount of their monthly treasury bond purchases. As it turned out, they’re even meeker (or, more meek?) than I thought—they punted. No taper just yet. As I type, Ben Bernanke is justifying why—in the face of diminishing returns and asset bubble risk—the Fed will, for now, continue unabatedly creating money and buying bonds.
While 150 Dow points (at this moment) might not be the “monster rally” I suggested a punt would spark, it does reflect the acute myopia suffered by today’s stock trader. Someday, let’s pray, the Fed will muster the courage to risk upsetting the apple cart. Hopefully before they do too much damage to the price of apples…