A firefighter's first rule of survival is "know your way out". The same can be said of financial firefighting. Though it has no intention of exiting soon, the Federal Reserve is planning its path out from the extraordinary measures it has taken to free credit markets and boost demand.rnWith other central banks, the Fed is under growing pressure to explain its exit strategy in order to allay fears that its policies will produce inflation. On June 2nd Angela Merkel, the German chancellor, launched an astonishing attack on the Fed, the Bank of England and the European Central Bank (ecb) for their loose monetary policies. Mrs Merkel's outburst, which trampled on a German political tradition of not commenting on the actions of independent central banks, makes life awkward for the ecb, which was due on June 4th to announce details of a plan to buy €60 billion ($86 billion) of covered bonds.
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