The surprise of the week was not the goofy ending to the cliff. It was the minutes from the Fed. The meeting in question took place on 12/12, just 23 days ago. Some very major announcements came as a result of that meeting. A new, and much more aggressive Fed policy was revealed. For the first time ever, the Fed set a target for when monetary policy would change.
When economic historians write about how it happened that under Fed Chair Ben Bernanke the U.S. economy performed worse than it had under any Fed Chair since Eugene Meyer 1930-1933--or maybe, if we are being strict, Arthur Burns 1970-1978--one important reason will be Ben Bernanke's desire to seek consensus within the FOMC instead of doing what his previous academic analyses suggested was the right thing to do.
In that context, one cannot but find this from Jon Hilsenrath very worrisome:
Today, the Federal Reserve's monetary policymaking body, the Federal Open Market Committee (FOMC), shocked market participants and central bank observers by refraining from reducing the pace of monthly bond purchases it makes under the open-ended quantitative easing program it introduced exactly a year ago.
With Bernie Sanders's hold on Ben Bernanke in the news today, it's worth repeating that this does not, in any way, threaten the Fed's "independence." The confirmation process is natural, and if Bernanke were to be defeated,