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The price of Fed power


Christopher Swann is a Reuters columnist. The views  expressed are his own –

NEW YORK,  July 15 (Reuters) – Leaders seldom turn down the opportunity to empire-build,  and Ben Bernanke appears to be no exception.

The Federal Reserve has  been lobbying hard to become America’s systemic regulator, charged with  preventing a repeat of the 2008 meltdown. This would add further prestige to the  Fed and luster to the role of its chairman. The public spirited Bernanke may  also feel that there are simply no other viable candidates for the job.

But the new powers would be a curse that would risk undermining the  effectiveness of monetary policy and straining relations with Congress. If  anything, Bernanke would be well advised to lay off as much regulatory  responsibility as possible.

Live Fed blog


The Federal Reserve is entering a period of transition as a two-day meeting concludes today. Many questions remain on whether a recovery can take hold and on whether the central bank should start withdrawing from the extraordinary measures it took during the financial crisis. This may also be the beginning of the end of the Bernanke era at the Fed: President Obama must decide by next year whether to renominate the Fed chairman, whose term expires at the end of January.

Today’s statement from the Fed’s policy group, the Federal Open Market Commitee, may show changes in the Fed’s view of the economy and may also give hints of an exit strategy. Starting at 2 p.m. on this blog, Reuters columnists will discuss the Fed, the economy and the Fed statement, due out at 2:15 p.m. Please join us.