To Accommodate Or Not To Accommodate...

That is the question in front of Greenspan, as he looks to cement his Fed chairmanship legacy (to the extent that there even is one, since we may be seeing the unintended economic consequences of his policies for years to come!). Part of the reason why long-term yields have remained low may be because Greenspan has been remarkably transparent (and consistently so!) with his "measured" language rhetoric which has created an incredible price stability and has thus aided the U.S. economic expansion since June of 2004. Does he give the market false hope that the rate rises are nearing an end? Or does he stick with a tried and tested approach which has been so successful in the last 17 months -- why fix something if it ain't broke? I am leaning toward the latter, as I think Greenspan might want to let Ben Bernanke establish his own credibility and make his own mistakes (and yes, there will be mistakes!). To be honest, I could be way off here, as again, I am going against the generally accepted market consensus, but that tends to be the flavor of the month, as I did call for a higher euro when everyone else was extolling the virtues of the greenback -- and I lived to tell the story ;-)