Bernanke Timeframe on Key Interest Rate Provokes Most Dissents (3) Since 1992

Is Bernanke turning into a dictator at the Federal Reserve?  This is the most dissent for a Fed Chairman since 1992 so you have to wonder how much of this is politics to protect Obama.  Call me a skeptic, but this smells big time to actually say what the rate is going to stay until the middle of 2013.  Does that mean if a Republican is elected Bernanke will run to raise the key interest rate in the middle of 2013?  Do I think he could be that political?  Absolutely!  

Could be really wrong but all of this smells big time.  Why was it necessary to name a date that far in the future?  Don't know much about the Fed but when three of the regional Fed Chairs from Dallas, Philadephia, and Minneapolis object, there is something wrong.  

Bernanke Timeframe on Key Interest Rate Provokes Most Dissents Since 1992By Craig Torres and Josh Zumbrun - Aug 9, 2011 4:48 PM CT  

Ben S. Bernanke lost the full consensus of the Federal Open Market Committee as he reached for another non-traditional tool and provoked three dissenting votes in the process -- the most for a Federal Reserve chairman since 1992. 

For the first time today, U.S. central bankers specified a date for their commitment to low borrowing costs, saying the benchmark rate will stay in a range of zero to 0.25 percent at least through mid-2013. The new language replaces their prior promise to keep rates low for an “extended period.” 

Today’s decision shows that a Fed chief can govern with more than two opposing votes, and it opens the door to bolder action if necessary, said Roberto Perli, a former economist in the Fed’s Division of Monetary Affairs, which helps craft the language of the FOMC statements. 

“We have reached the point where Bernanke is taking control and saying we have to do the right thing no matter how many people dissent,” said Perli, a managing director at International Strategy & Investment Group in Washington. “It shows the committee can move forward.”
Seven members of the panel favored the action. Richard Fisher, president of the Federal Reserve Bank of Dallas, Charles Plosser of Philadelphia and Narayana Kocherlakota of Minneapolis voted no, preferring to maintain the existing “extended period” language. The last time three FOMC voters dissented was on Nov. 17, 1992, under Bernanke’s predecessor, Alan Greenspan. 

History of Discomfort 

Fed officials have a long history of discomfort with pledges that limit their policy flexibility, minutes of their meetings show. The deterioration of the economic outlook, and the limits of monetary policy when interest rates are already near zero, prompted Bernanke to opt for the time commitment -- even at the cost of three dissenting votes, said former Fed Governor Laurence Meyer.  

Source:  Bloomberg,com