The Fed is typically looked at as a driver that only stears down a one-way street. To many Greenspan critics, it often appeared that he didn’t know how to slow down gradually and avoid overshooting the intersection. After listening to Ben Bernanke today, it was refreshing to hear that he is contemplating a real “pause.” As I mentioned in my post, “Rates of Interest”, there is no guarantee that once Ben stops raising rates, that he is obligated to stop entirely until the next time he needs to initiate a long sequence of rate reductions. Today, he actually said, “There is always the possibility that if there’s sufficient uncertainty that we may choose to pause simply to gain more information, to learn better what the true risks are and how the economy is actually evolving.” This is a huge divergence from past Fed mentality and one that I applaud. Unfortunately, I am doubtful that our current market will like dealing with this kind of uncertainty if it ever happens. The critics want to avoid overshooting but are they really willing to entertain a Fed that tries to dial in the ideal rate by raising, pausing, lowering, pausing, raising, etc.?