Those hoping that the “Greenspan put” lives on in his successor are likely to be disappointed. Ben Bernanke, chairman of the Federal Reserve, has made pretty clear in the past that he does not plan to ride in with interest rate cuts to save the markets from themselves. Instead the Fed will take its decisions based on the economic data.
A cut in short-term interest rates this year is not yet a foregone conclusion. But the Fed can expect to be back centre-stage, starting from this week when all eyes will be focused on any comments it makes about the impact of rollercoaster markets on the economy.
