Federal Reserve Chairman Ben Bernanke said the debt ceiling debate on Capitol Hill "disrupted" the economy, and he called the broken political process the greatest economic challenge we face.
In a widely anticipated speech at Jackson Hole, the steward of U.S. monetary policy did not offer promises for new quantitative easing. Nor did he demand higher spending or tax stimulus from Washington. In the tradition of Fed speeches, today's address was bone-dry and painted with the broadest of strokes. The word "term" (as in long- or short-) appeared no less than 34 times.
But with those reduced expectations for high-octane rhetoric, this is as direct as you'll hear a Fed chair thwack Washington:
Finally, and perhaps most challenging, the country would be well served by a better process for making fiscal decisions. The negotiations that took place over the summer disrupted financial markets and probably the economy as well, and similar events in the future could, over time, seriously jeopardize the willingness of investors around the world to hold U.S. financial assets or to make direct investments in job-creating U.S. businesses.
Shorter Bernanke: Get your act together, guys.
Reactions fell into two camps. One side focused on what they didn't hear: Promises to help the economy. The other side focused on what they did hear: Vague, ambiguous ("Fed-ish") promises to not rule out further assistance.