Tracking the 7 Stages of Fed Policy

In this morning’s note David Rosenberg touched on the 7 phases of Fed policy.

Phase 1: Attempting to stabilize the mortgage market (August 2006 – January 2007)

Phase 2:  Responding to the financial crisis (February – September 2008)

Phase 3:  Containing the Great Recession (September 2008 – January 2009)

Phase 4:  Saving the banks (January – March 2009)

Phase 5:  Responding to the weak recovery/boosting the housing market (March 2009 – September 2012)

Phase 6:  Debt monetization/wealth effect pursuit (September – December 2012)

Phase 7:  Reviving the Phillips Curve – in search of BOTH higher inflation and lower unemployment (December 2012 … )

I think he should have added a few….Namely:

Phase 8: Pushing on a string

Phase 9:  More pushing on strings

Phase 10:  Whispering sweet nothings to the market through cheerful rhetoric

Phase 11:  Ben Bernanke exit stage right, 2014 without having fully revived the economy during the greatest expansion of monetary policy known to man….

Source: Gluskin Sheff

Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.

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  • Cowpoke

    Phase 2.5 (Fear Mongering at it’s finest..) Fiscal Shake Down of the POTUS.. By Putting the fear of God into G.W., Hanky Panky Paulson (Formen Golman Sachs CEO) And Ben B.

    “The president listened as Ben S. Bernanke, chairman of the Federal Reserve, laid out the latest terrifying news: The credit markets, gripped by panic, had frozen overnight, and banks were refusing to lend money.

    Then his Treasury secretary, Henry M. Paulson Jr., told him that to stave off disaster, he would have to sign off on the biggest government bailout in history.”

  • Wulfram

    Oh…come on

    “Phase 11: Ben Bernanke exit stage right, 2014 without having fully revived the economy during the greatest expansion of monetary policy known to man….”

    Everyone — or at least our friendly Canadian neighbors — knows you Exit…Stage Left. Especially since Ben Bernanke isn’t right.

  • http://www.orcamgroup.com Cullen Roche

    :-)

  • InvestorX

    “Whispering sweet nothings to the market through cheerful rhetoric”

    Hahaha, LOL

  • http://www.nowandfutures.com bart

    Recess(shun)…

  • Dennis

    Tracking 7 stages of the FED policy after all these years of being an economist is like a teenager stuck in fourth grade. If he’s any good, he should be able to give a range of forward looking FED policies (stage 8 through….12) and come up with asset allocation strategies for these stages. It’s good to learn through the lens of history but the US has a group of people who will be creating new directions, policies and stuff like that, so you can learn the old stuffs all you want while they are cranking out/experimenting new stuffs. Bernanke is an example of this. This is why most people are totally wrong.