First We had Mishkin....
....Now We have Chicago FRB President Charles Evans.
http://www.chicagofed.org/news_room/speeches/2009_11_13_BoF_speech.cfm
"Central banks should not make fighting asset bubbles a monetary policy objective and regulation might be a better way to respond to rapid asset price movements if needed to ensure financial stability."
Evans in this speech expressed uneasiness at the notion of central banks trying to achieve a targeted decline in asset prices. He is very skeptical that policy makers would be able to sort out in real time whether a rapid increase in asset prices means the asset is becoming overvalued. The best way to combat this is through proper regulation.
Well. We don't have any meaningful regulation to speak of so I am left to think that the FRB is going to willfully ignore future asset price bubbles as well? The FRB doesn't want to be publicly and politically blamed for a correction in the markets. So they rationalize bubbles as a way not to do their jobs.
No wonder stocks keep flying every day.
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