Fed Is Afraid of Stock Market Falling and Getting Blamed

The Federal Reserve played a major role in helping the stock market recover from its correction that peaked last Wednesday, when the S&P 500 Index fell 10 percent below its Sept. 19 record high, says MarketWatch columnist Howard Gold.

"Like the cavalry in those classic John Ford westerns, the Fed rode to the rescue," he writes.

First, James Bullard, president of the St. Louis Fed, said the central bank might have to extend its quantitative easing that was expected to be ended at the Fed's meeting next week.

Then Boston Fed President Eric Rosengren said he could "easily imagine" the Fed refraining from an interest-rate increase until 2016. Until recently, most economists had expected the Fed to move around mid-2015.

"They [Fed policymakers] are afraid of the [stock] market going down and getting blamed," Jim Bianco, president of Bianco Research, tells Gold. "They are definitely in the market manipulation business, and nothing has changed."

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