In this story at Reuters, Federal Reserve historian Allan Melzer shares a few thoughts on what lies ahead for incoming Fed Chair Janet Yellen following tomorrow’s departure of current Fed Chairman Ben Bernanke. One thing seems clear, as was the case for Alan Greenspan, we won’t know the full impact of Bernanke’s policies for years to come.
To Allan Meltzer, a leading Fed historian, no outcome looks good for Bernanke. “If they go too fast, we’re going to get a recession. If they go too slowly, we are going to get serious inflation. If they do neither, we could get both,” he said.
The first round of quantitative easing in 2008 and 2009 was heroic, Meltzer said. But the second and third rounds were “just a mistake, a serious mistake, that will have problems.”
“History will judge his response to the 2009 crisis very well,” he said of Bernanke. “They will judge the aftermath as being much too strong and unnecessary.”
Another thing that seems clear is that the image above will be an enduring one.