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Put out.

Investors Chronicle

| April 13, 2007 | COPYRIGHT 2007 FT Business. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan.  All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)Copyright

Global stock markets have BECOME excited by the possibility that there's a Bernanke put. The idea is that, if the economy or market gets into trouble, US Federal Reserve governor Ben Bernanke will cut interest rates, thus protecting us against falling share prices.

This notion was given credence last month when the Fed dropped its bias towards raising interest rates, despite signs that the economy is recovering - the Institute for Supply Management index is back above 50 - and even though the outlook for inflation isn't improving.

Stock markets have welcomed this. But they shouldn't. The Bernanke put, like its predecessor, the Greenspan put, threatens to ...

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