Nothing much to see here. It's not surprising in the least. Forbes has been a big "hard money" proponent just like the Wall Street Journal editorial page.
"Markets have positioned themselves for some sort of Fed easing, particularly in the form of an extension of Operation Twist. While the U.S. economy has definitely slowed down, which hit along with the flaring up Europe’s sovereign debt crisis, the threshold for further QE hasn’t been reached, according to Nomura. The effect of a “twist of less resistance” would offer limited benefits as the extension would last three to four months at most, they argued. Fed Chairman Ben Bernanke would be better offer disappointing markets on Wednesday, keeping his powder dry to build a bigger case, in case he needs it, later this year."
He'd be better off disappointing markets by keeping his powder dry to build a bigger case. Hmmm. What bigger case might that be? In a sense there is an argument that Operation Twist is the "twist of less resistance" it's true but this idea of "building a bigger case" is pretty fishy.
Two questions: How and why will it build this bigger case? By not doing anything now the economy will worsen thus building a bigger case-which actually implies that even a twist of less resistance has some kick in it.
The why couldn't be more transparent could it? It goes without saying that the bigger case in mind is for voters to not re-elect President Obama, this is what the "bigger case" is.
So it is that we know what point "later this year" the Fed should do something after building this bigger case(to vote out the President). It will be after Romney wins.
Of course, as it turned out, the Fed decided not to totally disappoint the markets-though not to totally make them happy either but simply do exactly what the market expected-the twist of less resistance. This was somewhat disappointing but not too much-the markets ended flat. And the Fed did say that QE3 is on the table-though he insists there are serious risks in this.
The markets then were not terribly disappointed if not exactly delighted which must have disappointed Forbes.