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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: Crimson Ghost who wrote (73579)11/3/2006 11:34:02 AM
From: Gemlaoshi  Read Replies (1) of 110194
 
Fed just covering their ass for a truly monstrous policy error IMHO.

CG,
Fat chance it was an honest "policy error". The data show that inflation was already accelerating by the beginning of 2004, but the Fed delayed until the fall of 04 before beginning to raise rates in earnest.

The key here is that 2004 was an election year with a tight presidential race, and Greenspan was not about to seriously raise rates before the election. As a result, the Fed was behind the curve and allowed the housing boom to get out of hand.

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