President Obama’s hint that long-serving Fed Chairman Ben Bernanke will be leaving the central bank when his term ends signaled that the chairman will want to begin tapering this year, says Harvard professor and former Reagan adviser Martin Feldstein.
“One of the implications of the fact that Ben is now very, very likely to be leaving at the beginning of the year is that he’s going to want to get the so-called exit strategy under way,” Feldstein said on CNBC television today. “He’s going to want to start the tapering before he leaves so that he can say, ‘I did all these good things, and I put us on an exit path.'”
Whether or not the Fed will begin its plans to taper back quantitative easing has been the source of pundit speculation and market volatility as of late.
In an interview with Charlie Rose on PBS, Obama said that Bernanke has “already stayed a lot longer than we wanted or he was supposed to,” leading many Fed-watchers to conclude that the chairman will step aside when his term ends in January.
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