At Least No One Can Say the Federal Reserve Didn't Know What it Was Doing

Don't worry--the Federal Reserve is very alert to exactly what it's doing. From AP via Yahoo!:

The Federal Reserve doesn't expect the recovery will be strong enough to quickly drive down the jobless rate, and acknowledged its efforts to keep the rebound going could feed a new speculative bubble.

Record-low interest rates "could lead to excessive risk-taking in financial markets," according to documents released Tuesday of the Fed's closed-door meeting earlier this month….Although Fed officials saw the current likelihood of that as "relatively low," they pledged to "remain alert to these risks."

At the Nov. 3-4 meeting, Fed Chairman Ben Bernanke and his colleagues kept the target range for its bank lending rate at zero to 0.25 percent.

Fed policymakers also pledged to hold rates at such super-low levels for an "extended period," to ensure the recovery gains traction. Most analysts predict that means rates will stay where they are through the rest of this year and into part of 2010.

See my November Reason magazine feature on the mainstreaming of anti-Federal Reserve thought.