… But addressing the problem of illiquid financial markets using the blunt instrument of monetary policy, a cut in the monetary policy rate, would be clear confirmation that the Fed is concerned about financial markets over and above what these markets imply for the real economy. Such regulatory capture would effectively redirect the ‘Greenspan put’ from the equity markets in general to the profits and viability of a small number of financial institutions. It would not be a proper use of public money. [Link]
This was published on 18 August 2007. They rapidly cut the Federal Funds rate after these comments were written. So?