In the hope that the expected results are the appointment

The Federal Reserve has today one of his appointment the most sensitive to negotiate with Wall Street and investors long. The decision of its policy Committee monetary (FOMC) depends indeed the authority of Ben Bernanke, the new President of the US Central Bank since last February, on financial markets in the midst of doubts.

For most economists a 17th consecutive increase of 25 basis points in interest rates from the Fed, to 5.25, is almost acquired. The hope of a pause in the tightening of monetary policy had caused Ben Bernanke in his testimony, on 27 April last in Congress, and the publication of disappointing figures for employment in May is far. Since then, inflation is passed back at the top of the concerns of investors, especially since the announcement of a rise in the price of 0.3 (excluding energy and food) in May. Either a figure above the expectations of economists for the third consecutive month.

Expected clarification

The spectre of a return of inflation coupled with slow growth is so in the minds of more and more economists to invite the Federal Reserve to rely more heavily on the monetary brake. Thus, economists are more an increase of 50 basis points, or even, even if it is much more rare, of 75 basis points. "The place of the Fed, to calm financial markets hesitant that we know today, I would note the rate by 75 basis points and I would say:"our policy of monetary tightening is complete"", explained Kevin Hassett of the American Enterprise Institute, a "think tank" curator of Washington, on the CNBC Channel.

The release will be issued at the end of the meeting of the Committee on monetary policy today will be scrutinized with as much attention as the decision itself. Indeed, many economists hope that Ben Bernanke will provide clarification on its assessment of the inflation and expectations of inflation, respectively qualified "modest" and "contained" in the last FOMC, may 10. The three or four last time Ben Bernanke spoke, it appeared to contradict himself and the markets reacted nervously. Yesterday, Martin Regalia, Chief Economist for the Chamber of commerce of the United States, one of the most important business lobby, said: "he says one thing one day and the week after contrary.".

To some economists, the trial is Bernanke on his communication is however unjustified. "Markets read Ben Bernanke as Alan Greenspan, but it is much less"oracle of Delphi"than was his predecessor, said Ethan Harris, an economist at Lehman Brothers." Bernanke says what he really thinks, and not what he will do. "In fact, believe many defenders of Ben Bernanke, the current shaking financial markets are rather to put on the back of a lax to Alan Greenspan, when he was throttles and seen the effects delayed today.

Longer term, the majority of economists anticipate a monetary tightening up to 5.75, or even 6 fall. "The Fed the not trumpeted on the roofs, but it knows that its monetary policy has no effect when it penalizes the financial markets," said Ethan Harris. Until now, the level of interest rates has no effect on the economy; to calm inflation and growth, it must strengthen more than necessary, while avoiding the recession, believes the latter. It is time, then, to mark a pause, and even before that inflation has disappeared, and wait for the effects of this policy on markets and the economy. In the hope that the expected results are the appointment...