Bernanke: The Fed’s Exit Strategy

The Fed’s Exit Strategy by Ben S. Bernanke

Each of these policies would help to raise short-term interest rates and limit the growth of broad measures of money and credit, thereby tightening monetary policy.

Overall, the Federal Reserve has many effective tools to tighten monetary policy when the economic outlook requires us to do so. As my colleagues and I have stated, however, economic conditions are not likely to warrant tighter monetary policy for an extended period. We will calibrate the timing and pace of any future tightening, together with the mix of tools to best foster our dual objectives of maximum employment and price stability.


In other words, the only way fed can control inflation is by raising interest rates.
But it will not raise rates because that will further weaken the weak banks and the weak economy. It will let inflation run most of its course.