QE Infinity? No end in sight for money printing Market consensus quickly adapted to the reality that Federal Reserve easing will go full-throttle until at least March. But even that thinking may be too aggressive. After all, when the U.S. central bank began the third round of its bond-buying program known as quantitative easing, it made it clear that it was an open-ended endeavor. That meant the $85 billion a month of so-called money printing would continue as long as the Fed and Chairman Ben Bernanke deemed necessary. Previous QEs had been more specific about the extent of the efforts. In a recent CNBC interview, Chicago Fed President Charles Evans said there was plenty of room left for more easing and plenty of reason to do it considering the still-uneven pace of economic recovery. Meantime, risk assets have rallied, with the S&P 500 around its record high, interest rates have dropped, and the Fed appears nowhere close to taking away its vaunted punchbowl. Consequently, references to QEternal or other similar pejoratives indicating Fed easing could go on forever no longer seem quite so ridiculous. There is a danger that the Fed has missed its window of opportunity. If its waiting for some degree of fiscal certainty, this really could turn into QEternity, Paul Ashworth, chief North American economist at Capital Economics, said in a report (cnbc)
Posted on: Sat, 26 Oct 2013 09:07:45 +0000
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