We are sensing something of a trans-atlantic divide here. Don’t let’s fall out.
Camp UK: “troubling“; “the idea that an aggressive cut is good news may not last long“; “the present chairman, like his predecessor, is going to err on the side of too much action rather than not enough”; “History will not treat the “Bernanke put” so kindly.”
Camp US: “pulled no punches“; “something for just about everyone“; “we hope he’ll make a restoration of the Fed’s character his main priority”; “bold cut means savings for consumers”;
The main message – that Mr Bernanke, in chopping interest rates by 50 basis points and also cutting the discount rate at which it lends to banks, had made an aggressive bid to save the US economy from a sharp slowdown – is agreed. But the spin on each side of the Atlantic seems rather different.
FT.com’s poll on whether Mr Bernanke had done the right thing in cutting rates by 50 basis points was on Wednesday morning delivering a resounding no, to the tune of 71 per cent. We wait to see how quickly that might reverse once those stateside get out of bed and to their computer screens.
Even the critics in the US seemed to be swinging at Mr Bernanke from the other direction. Nouriel Roubini called the 50bp cut, “still too little too late“. He’s convinced that despite the Fed chairman’s attempt at recession-busting the US economy is only headed one way.
But what’s this? Dissent in the ranks. The New York Post, the organ of one Rupert Murdoch, was singing its own rather European tune. In their view, the chairman “buckled to Wall Street’s demands for more cheap money to cover its bets and losses – but the price of the cut could be steep.”