Behind the curve?

There is growing concern amongst market pundits that the Fed under Bernanke's helm is not doing enough to counter the economic troubles ahead. Since the Fed first took action after the subprime crisis earlier in the year, a very distinct style and one in sharp contrast to the former chariman's has emerged. Academic and consensus based are two keywords that aptly describe Bernanke's fine tuning style and although it may be appropriate in times of relative calm, it does not seem suitable in an environment of turmoil. It is also in sharp contrast to the quick and dirty or more authoritarian style of Greenspan who did not hesitate to take radical action in times of duress. He has, for example, received credit for averting a deeper recession from the internet bubble.
Nevertheless, navigating in the current crisis is proving to be extremely challenging (even Greenspan recently remarked that the current environment is probably the most difficult he has ever observed) not only because of the two forces (inflation and growth) moving in opposite directions but also because unlike previous downturns, the origins of the current one is the credit market and the extent of the damage is still difficult to asses with any degree of accuracy due to the opaque nature of the instruments behind the subprime boom of earlier years. Most recent inflation figures are indicating the beginnings of a surge which in a way restricts the Fed's room for maneuver on the side of easing.
What is clear is that the market have so far been disappointed with the way in which the Fed is handling the crisis. The most recent 25 basis point cut in the discount window was perceived as just a symbolic move and nothing else. Yesterday's announcement of a proposal of introducing more stringent rules on mortgage borrowing is also seen as not enough to curb the crisis. Time is of the essence and every mistake now will incur a large penalty later.