In reaction to Federal Reserve Chairman Ben Bernanke’s speech on Friday, Senator Bob Corker, R-Tn., a member of the Banking Committee, said the market response “highlights just how far away from fundamentals our unhealthy obsession with the Fed has taken us,” noting it’s time for “policy makers to meaningfully address the underlying problems in our economy.”
In his remarks in Jackson Hole, Wy., Thursday, Bernanke left open the possibility of further Fed action, but clearly stated monetary policy cannot “neutralize the fiscal and financial risks that the country faces.”
Senator Corker said, “The schizophrenic gyrations that occurred in the markets today before, during, and after Chairman Bernanke’s speech highlight just how far away from fundamentals our unhealthy obsession with the Fed has taken us, and today’s speech highlights the desperate need for policy makers to meaningfully address the underlying problems in our economy. To that end, we need to enact true fiscal reform, embracing pro-growth tax policies and giving the world certainty that we can address the challenge of our structural deficits and debt by reforming entitlements. These policies from Congress, not more short-term stimulus from the Fed, are the ingredients necessary for restoring growth in the American economy”
This week the Financial Times ran an op-ed (“Bernanke should show some humility”) by Senator Corker, in which he argued that the Federal Reserve has become a distraction from substantive policy debate in Congress to address the nation’s fiscal situation.