Quote from Judy Shelton in the WSJ: “Bernanke Talks, Markets Wobble. There Must Be a Better Way”
Since Federal Reserve Chairman Ben Bernanke testified before Congress’s Joint Economic Committee Wednesday morning, commenting on the economic outlook and responding to questions from lawmakers on the likely path of monetary policy, financial markets have experienced turmoil. Triple-digit gains in the Dow Jones Industrial Average turned negative later that afternoon. That spurred a 7.3% plunge in the Japanese stock market, which in turn dragged down bourses in Frankfurt, London, Paris and Rome on Thursday morning—sending U.S. stocks on a roller-coaster ride.
Mr. Bernanke must be thinking: “Was it something I said?”
We should be asking ourselves a different question: Does it make sense for financial and economic outcomes to be so highly dependent on the pronouncements of a single individual? Would it be better if monetary policy were more rules-based and less discretionary?