Bernanke exits as Santa Claus for now
He made tapering palatable, but in the longer term it may be seen as too late
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LIKE a Shakespearean hero, Ben Bernanke exited the world stage with a flourish that received an ovation from investors.
By reducing the Federal Reserve's monthly bond purchases by US$10 billion a month, Mr Bernanke began the undoing of the extraordinary monetary stimulus measures that will define him in history books. It was largely a symbolic adjustment: the central bank will still buy US$35 billion of mortgage bonds, the majority of such bonds issued in the US and US$40 billion of Treasury bonds.
Mr Bernanke was faced with a dilemma at the last Federal Reserve Open Market Committee meeting he would chair. In May, his promise to begin the gradual retreat from the bond-buying programme known as quantitative easing had caused a spike in mortgage rates and a rout in the stock market.
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