Saturday, June 22, 2013

Ben Bernanke - Calling early victory?

Market reaction to Fed announcement of reducing easy liquidity it has splashed the markets with, has not come as a surprise to lot of investors. It is the timing, which caught few investors off-guard. US markets are not yet out of the rut, unemployment is still not back to pre-crisis range, business confidence has not improved significantly meaning none of the objectives of the QE has been achieved so far. Investors should keep in mind that Ben's term is getting over in January, and maybe the biggest reason of tapering down of QE is that he does not want to go down in history as the person who threw the world economy into deflation. He does not want to end up like his predecessor Alan Greenspan. Maybe that explains the call for early victory.

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