Dave Lutz of Stifel, Nicolaus just blasted a quick email out to clients regarding the latest reporting from star WSJ Fed reporter Jon Hilsenrath.
As Lutz sees it, the big story that everyone is talking about (how the Fed is thinking about its QE exit strategy) is not a big deal and doesn’t contain new information. There’s also another story about how there’s concern about asset bubbles forming. Lutz sees that story is interesting.
The one that really matters is about Bernanke and succession, and the possibility that he will be replaced by Janet Yellen.
In my opinion – the Fri piece was nothing on tapering – no shock there, and well documented – if anything, the read last night on asset bubbles was interesting, in conjunction with Ben’s speech Fri on them but smells like it targets bonds – not equities – but my vote for the most important goes to last night’s mentioning one of the successors for Ben, is BEN – “The next chief of the Federal Reserve will decide when to reverse the easy-money policies of Ben Bernanke, a judgment that could strangle the economic recovery if made too early or trigger runaway inflation if made too late – At some point, the next Fed leader will need to use untested methods to reverse the process, raising interest rates and siphoning up huge volumes of cash from banks. “They will be learning as they go,” said Laurence Meyer, a former Fed governor – The task could fall to Fed vice-chairwoman Janet Yellen, a meticulous and demanding Yale-trained economist, who issued prescient, early warnings about the housing bust – While Mr. Bernanke doesn’t appear to want a third term as Fed chairman, the president could press him to stay. Mr. Bernanke said in March he had discussed his plans “a bit” with Mr. Obama but declined to say more.” http://online.wsj.com/article/SB10001424127887323551004578441331455504010.html?mod=WSJ_hpp_LEFTTopStories