The Fed: Is There An Exit Strategy for Quantitative Easing?

The Fed: Is There An Exit Strategy for Quantitative Easing?

fed seal

The Fed has signaled plans to continue the current phase of Quantitative Easing (QE), which currently entails $85 billion of bond purchases per month, split between mortgage-backed and Treasury securities (Bloomberg).

But there are signs of increased concern behind the scenes, as the Fed’s Board of Governors contemplates the staggering size of the central bank’s balance sheet, now $2.93 trillion. Several Fed grandees have indicated they would like to see an exit strategy. Chairman Bernanke continues to champion the program, noting both the high level of unemployment and the long-term nature of much of it:

Bernanke said the nation’s 7.8 percent unemployment rate in December “is not an acceptable situation” especially when 40 percent of the jobless haven’t worked for six months or more. There are “too many people whose skills and talents are being wasted,” he said. “We’ll be assessing the impact of our actions on financial market conditions and looking to see how those link up to developments in labor markets and in the broader economy.”

Bernanke’s last remarks are a nod to those in the Fed who are concerned about the potential for inflation if the central bank has miscalculated the need for additional stimulus. The situation has become more complicated as fiscal policy, thanks to the tax increases embedded in the fiscal cliff deal, is now pulling in a different direction.

Get Free Email Updates!

Signup Now to Receive Updates and Alerts!

We will never give away, trade or sell your email address. You can unsubscribe at any time.

@streetwise_IT

Retired from American Airlines after a 34 year career in corporate treasury management. Professional income tax preparer. Graduate of Georgetown University (BS Foreign Service) and The University of Texas at Arlington (MBA). Contributor to TMR since 2007. Host of "Italian Tomatoes" show on Blog Talk Radio. I am a center-right Republican with a passion for business, history and current affairs. Go to Blog Talk Radio to listen to my latest show Why Jeb Bush Is Not The One

More in

monty python jehovah

The First Stone Club- Juice Been There, Done That

Streetwise_ITMay 29, 2015
5_272015_b3-crow-warm-sign-g8201_c0-428-1870-1518_s561x327

Tom Steyer, Pope Francis, and climate change hypocrisy

Steve FoleyMay 29, 2015
John-McCain-pointing-Reuters-640x480

ACU Slams McCain for Selectively Citing Ratings to Make Himself Look Better

Steve FoleyMay 29, 2015
FILE - In this May 11, 2003, file photo, Microbiologist Ruth Bryan works with BG nerve agent simulant in Class III Glove Box in the Life Sciences Test Facility at Dugway Proving Ground, Utah. The specialized airtight enclosure is also used for hands-on work with anthrax and other deadly agents. The Centers for Disease Control and Prevention said it is investigating what the Pentagon called an inadvertent shipment of live anthrax spores to government and commercial laboratories in as many as nine states, as well as one overseas, that expected to receive dead spores. (AP Photo/Douglas C. Pizac, File)

Regarding the Latest Anthrax Blunder

Steve FoleyMay 29, 2015
Stop-the-Obamacare-Nightmare-e1421280136219

Obamacare’s State Exchanges: ‘Overpromised And Under Delivered’

Steve FoleyMay 29, 2015
The-Smell-of-Napalm-in-the-Morning

I Love the Smell of Fossil Fuels in the Morning!

Steve FoleyMay 29, 2015

The Minority Report is a network of websites devoted to Conservative & Libertarian politics in the United States. In 2014 the network had over 20 million page views!

On this site you'll find posts & links to some of the best and most comprehensive center-right news and opinion on the net...

Archives

Copyright © 2014 The Minority Report Network