James Paulsen, chief investment strategist at Minneapolis-based Wells Capital Management, comments on U.S. Federal Reserve Chairman Ben S. Bernanke’s statement today in Jackson Hole, Wyoming.
Bernanke said the central bank still has tools to stimulate the economy. He didn’t provide details or signal when or whether policy makers might deploy them. Paulsen, whose company oversees $340 billion, spoke in a telephone interview.
On the Fed’s relationship to the stock market:
“The Fed basically started to break the precedent that was established where it has become a slave to the market. The market whines, and the Fed jumps. That’s a dangerous precedent. If they can stick to this and let the market find its own bottom, they will come out of this stronger. People will start to develop some confidence that this thing can recover on its own without Fed assistance.”