This is a summary of the consensus concern about the new policy of quantitative easing II:
"But many worry about a massive expansion in a central bank balance sheet that already tops $2 trillion. Fears are the Fed's action will have limited impact in boosting credit availability, while at the same time increasing the chance inflation could break out at some point."
Derby, Michael S., 2010. Bernanke stands by fed's moves. The Wall Street Journal, Nov. 6.
I notice that there are two viewpoints published in Barron's on the same issue. I will read and analyze today.
Overall, I believe the US economy is in a stage that requires self-healing. Of course unemployment is a major concern and deflation remains a lingering threat. However, I think it is uncertain if the Fed alone (through balance sheet expansion) can turn this situation around.
No comments:
Post a Comment