In this morning’s note David Rosenberg touched on the 7 phases of Fed policy.
Phase 1: Attempting to stabilise the mortgage market (August 2006 – January 2007)
Phase 2: Responding to the financial crisis (February – September 2008)
Phase 3: Containing the Great Recession (September 2008 – January 2009)
Phase 4: Saving the banks (January – March 2009)
Phase 5: Responding to the weak recovery/boosting the housing market (March 2009 – September 2012)
Phase 6: Debt monetization/wealth effect pursuit (September – December 2012)
Phase 7: Reviving the Phillips Curve – in search of BOTH higher inflation and lower unemployment (December 2012 … )
I think he should have added a few….Namely:
Phase 8: Pushing on a string
Phase 9: More pushing on strings
Phase 10: Whispering sweet nothings to the market through cheerful rhetoric
Phase 11: Ben Bernanke exit stage right, 2014 without having fully revived the economy during the greatest expansion of monetary policy known to man….
Source: Gluskin Sheff
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