From James Grant’s Mr. Market Miscalculates. This is from a piece written on 5/11/2001

“The soundness of a central bank varies inversely with the breadth of its mandate. The more it’s expected to do the longer the odds against its success.”

“The Fed’s mandate is all encompassing. Roughly speaking, it is expected to deliver the earth (“price stability”), the moon (full employment) and the sky (a solvent financial system, at the center of which is a rising stock market.) Lately, of course, the moon and the sky have been at the top of the policy agenda. To the argument that the Fed has somehow managed to succeed at this impossible work, we reply: Wait till all of the cyclical returns are in.”

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