WASHINGTON (Reuters) - Policy-makers at the U.S. Federal Reserve stepped up their anti-inflation rhetoric this week after a bond market sell-off delivered a sharp reminder that they ignore investors at their peril.
Extreme bond market volatility reflects uncertainty over the inflationary impact of aggressive Fed action to defeat the severe U.S. recession, and could cool the central bank toward further efforts to lift growth by buying up U.S. Treasuries.
Fed Chairman Ben Bernanke tried to placate concerns that the central bank will tolerate higher prices to ensure recovery, while a couple of regional Fed bank chiefs called for an exit strategy from so-called quantitative easing.
"This is a day of reckoning that the Fed would have hoped (would come) a year or two from now," said Gregory Hess, an economics professor at Claremont McKenna College in Claremont, California. "They have done big things and now they face the consequences."
http://www.reuters.com/article/ousiv/idUSN0527980620090605We're being held hostage by the bond market! You know, all those debts are only pieces of paper. We could tell the bond market to FUCK OFF AND DIE by declaring JUBILEE!