economics deflation Bernanke

The [Un]expected Fed move

This is the guest post made by Andy Bebut from the Yellow Brick Road blog

Today the Federal Reserve made a surprising move to increase the discount window rate by 0.25%. The move is already covered in all respectable financial blogs so I feel necessary to add my 2 cents.

The first thing to keep in mind is that this move is truly symbolic. The outstanding discount window credit is something like $14 bln, virtually nothing. This rate doesn't mean anything really.

So what it is? It's a message, which I want to discuss. 

The typical reaction of the average blogger is that Bernanke is crazy anyway and is not aware that the economy is struggling, is living in his dream of 5% GDP growth and is already discussing the exit strategy. Well, if that's true there is not much to discuss, crazy is crazy.