THE PRICE OF LOST CREDIBILITY

摘要

After being revered for years as a monetary maestro, Federal Reserve Chairman Alan Greenspan now finds himself the subject of derision and doubt. Stung by wild swings in bond prices, investors blame the Fed chief for misleading the markets about the threat of deflation and the central bank's likely response to it. The result has been a loss of Fed credibility. And that's making it hard for the central bank to convince investors that the improving economy won't bring tighter credit and faster inflation. In an effort to set things straight, Greenspan used the Kansas City Fed's annual end-of-summer meeting of monetary mavens in Jackson Hole, Wyo., to provide his first public exposition of his brand of monetary policy. Unfortunately, Ms explanation fell short, raising as many questions as it answered. It also sowed confusion about one of the prime topics preoccupying the bond market; Just when will the Fed start raising rates?