Four Common Misconceptions About The Federal Reserve via MortgageOrb

WORD ON THE STREET: As you know, ever since the financial crisis began, the Federal Reserve has been lauded by some and criticized by others for its bold actions. This comes with the territory of being the nation's central bank. Certainly, much of the criticism stems from an economy that is very difficult for many citizens. And importantly, some of the criticism is deserved - and we at the Fed truly try to learn when we do fall short.

But some of the criticism stems from what I’ll call some “common misconceptions” or assumptions about the Fed. I would like to offer a plainspoken defense to some of those common misconceptions. It is a defense rooted in facts and numbers, to be sure - my rhetorical skills may not win over Fed critics, but the facts and numbers may help them and others understand how the Fed actually operates.

The extraordinary steps the Fed has taken over the last four years have led to some misconceptions and mistaken assumptions. Central banking and monetary policy are not easy to explain, but the Fed could have done a better job of it. But, at the end of the day, we’ve seen the creation of certain misconceptions, not supported by facts, about the U.S. central bank as an institution. The best way to address a misconception is to offer up the facts.


Read more...MortgageOrb: Content / Word On The Street / Four Common Misconceptions About The Federal Reserve