HONOLULU (HawaiiNewsNow) - The head of the Federal Reserve Board issued a warning about interest rates over the weekend. But a close reading of what Ben Bernanke said shows that he was really talking more about controlling Wall street than nudging the whole economy.
At the annual meeting of the American Economic Association Sunday, Bernanke said the fed must be open to raising interest rates, not just to curb inflation, but to pop bubbles like the soaring housing prices that came just before the Wall street meltdown a year and a half ago. But Bernanke also said stronger regulation is a better way to control that sort of thing.
Realtors and people buying and selling homes love low interest rates, so they'll focus on that. But to me what Bernanke was really trying to do was send a message to congress and banking lobbyists, regulate behavior with exotic investments or be prepared for the fed to do it by changing interest rates.
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