The Fed

New evidence suggests that the substantial drops in interest rates by the Federal Reserve have 1) not aided substantially the stock or debt markets and 2) have enhanced fears of inflation.  The Fed can have four interrelated goals:  help the securities markets, control inflation, keep unemployment rates low, or boast gross domestic product.  The first, third and fourth have substantial political overtones, the second-- controlling inflation, does not.  Our Fed, seemingly heavily influenced by savage criticism from the financial sector (who have called for Bernanke's head) and by a pending national election, appears too focused on the securities markets.  The European Central Bank, isolated from State political influences by top level of multiple state administration, has shown much less sensitivity to political trade winds and is focused more on controlling inflation.  Have we taught the financial markets that over-the-top criticism of the Fed will have an impact on Fed actions?  If so, we are in for some tough times.