Investors parse federal reserve meeting notes the way believers in Kabbalah parse ancient texts. If Ben Bernanke says might rather than may regarding a particular policy action, markets react. The import of his words, perceived and real, has grown in tandem with political dysfunction in Washington, since Bernanke--along with his Continental counterpart Mario Draghi, head of the European Central Bank--are the last men standing between the West and economic stagnation. Politicians can't or won't act to stimulate the economy. Only central bankers can save us.
But can they really? Does the Fed actually have any more useful tools in its kit...