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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?

To: Ian@SI who wrote (5474)	5/28/1999 1:39:00 PM
From: marc ultra	Read Replies (3) \| Respond to of 15132

Ian re <<<<<<, Very interesting commentary though unrelated to the legal mandate. There seems to be some confusion between mandate, powers, role, purpose, things they could do if so inclined, etc.>>>>>>> Per the Federal Reserve Act the goals of monetary policy are to promote effectively the goals of maximum employment, stable prices and moderate long term interest rates. You seem to suggest this is some kind of straightjacket telling the Fed what it can and can not do is which is incorrect as proven by history. The Fed can take actions due to concern about the market or potential inflationary expectations and easily justify their action within their mandate. For example if they thought we were in a bubble asset market they could reason such a market once it reaches extremes inevitably bursts causing an economic downturn from sudden reversal of any wealth effect which inevitably would cause lower employment etc. and you can make thousands of scenarios where the Fed would take all kinds of actions that you seem to think ignores their mandate despite the fact that under this same law we have seen history such as MrGreenJeans has pointed out. I guess if they raise rates multiple times and tank the market are you going to think your stock losses are illegal since the Fed wasn't acting in accordance with your interpretation of their mandate? I prefer to look at past and current reality then some assumption based on a personal interpretation of their mandate and how that will direct their action. Marc