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Thank God for Zero Hedge..
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Tyler Durden
Zero Hedge
Tuesday, September 21, 2010
It is no secret that the Federal Reserve, and its now semi-daily interventions in market liquidity via ever increasing Permanent Open Market Operations (aka POMOs, next on deck – Wednesday and Friday for a total of about $7-8 billion), is rather hell bent on creating the impression that the economy is alive and well courtesy of a ramping stock market (when the causal relationship is always the other way around, but who cares). A reader got so disgusted by the POMO ramp game, he sent in an angry letter to Brian Sack’s henchmen. Here is the Fed’s response.
Dear Mr. (removed to maintain privacy):
Thank you for your recent correspondence in which you expressed your concerns about the Federal Reserve’s influence on the stock market.
The Federal Reserve monitors all sectors of the economy, so that we can be prepared when crises arise. It is within this context that the Chairman is often called by Congress to offer his views on many issues that may or may not be directly related to monetary policy. I want to assure you that the Federal Reserve’s monetary policy actions are not aimed at correcting or influencing any particular market. As you know, the goal of monetary policy is to foster conditions conducive to sustaining sound, noninflationary economic growth over time and policymakers must make decisions that provide the greatest benefit overall.
Again, thank you for writing.
Sincerely,
JPD
Board Staff
So if “the Federal Reserve’s monetary policy actions are not aimed at correcting or influencing any particular market” is it safe to assume that actions are aimed at “correcting and influencing” all markets in general? Well, the Fed is already rampaging in USTs, Agency securities and FX, would it be too naive to assume equities are for some reason excluded…
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