Skip to content

ANSWER: “ALL OF THE ABOVE”

June 28, 2013

The Fed has been busy re-explaining exactly what they meant when they said they may consider tapering the ongoing bond purchases (QE). Yesterday, the New York Fed indicated that if the economy’s growth were to be less favorable than they expected, ‘asset purchases would continue at a higher pace.’

What I can’t understand is why a financial reporter doesn’t ask the question, “Mr. Fed Chairman, can you please tell me clearly what you are saying? Is your policy working and the economy is recovering, therefore you will begin to unwind the QE policies? Or do you see further concerns and therefore your monetary policy is not taking effect (yet) and you are going to print money until the end of time?” (OK so maybe you couldn’t ask it exactly that way!)

It is remarkable that reporters never feel a need to pin the Fed down on their conflicting positions. In this A or B question, the Fed says, “The answer is C, all of the above.”

Either the economy is recovering and we need to wean it off all stimulus, or it is not recovering (after more than five years) and we need to question the monetary policy that caused us to send trillions of dollars down a black hole.

Official image for Federal Reserve Policy. Printed with permission from Ben.

Official image for Federal Reserve Policy. Printed with permission from Ben.

Advertisements

Comments are closed.

%d bloggers like this: