Confidence in Fed may push asset prices higher if problems emerge

03/29/2010 | Wall Street Journal, The

The Federal Reserve is being credited with helping restore credit markets to health, but Fed policies may give investors a false sense of confidence, Peter Eavis writes. "[E]xcessive confidence in the central bank nearly always causes the market to overlook harmful economic and financial developments. So, if those materialize, and the Fed suddenly looks fallible, asset prices could be hit," Eavis writes.

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