Following the speech by Fed Pres Bullard Tuesday on the Fed’s ‘exit strategies’ where the discussion was more on how they will unwind their different programs rather than when, Fed Pres Evans is adding his thoughts to the debate. I want to first say that setting a time period is of course difficult due to the uncertainty with the economy but why can’t they come up with economic benchmarks by which to measure against. After a speech given on “The Credit Crisis and Policy Actions,” Evans said in a Q&A on the Fed’s exit strategies that the internal discussions are “to see how the balance sheet will evolve in different scenarios” and “not about any particular time frame.” Thus, as Bullard said yesterday, they seem to be relying on their “judgement calls.” I raise this because their success or lack thereof on getting the timing right will have a direct and dramatic impact on any recovery we will see.
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