The Fed should continue with QE, says St. Louis Fed chief Bullard, as the reaction in financial...


The Fed should continue with QE, says St. Louis Fed chief Bullard, as the reaction in financial markets (stocks higher?) proves the purchases have been effective. He says the program should be adjusted (higher or lower) based on incoming economic data. He tosses out negative interest rates as a possible policy (why not), but suggests the effects of such a move would be minor.

Comments (4)
  • Paulo Santos
    , contributor
    Comments (33732) | Send Message
     
    if the market being higher is proof of the policy's effectiveness, why not buy shares directly? Indeed, buy ALL the shares at ANY price. That would surely make it go higher. It would be a huge success.
    21 May 2013, 01:00 PM Reply Like
  • Bioalchemy
    , contributor
    Comments (175) | Send Message
     
    In other words, the program will be adjusted based on incoming sp500 index.
    21 May 2013, 01:15 PM Reply Like
  • Whitehawk
    , contributor
    Comments (3121) | Send Message
     
    Lol. This would be consistent with the "New Keynesian" policies that Bullard outlines in the slides.
    21 May 2013, 01:54 PM Reply Like
  • Whitehawk
    , contributor
    Comments (3121) | Send Message
     
    Bullard admitted that QE2 caused inflationary outcomes in his previous powerpoint slides. Since QE2, price transparency has been a growing issue, not a declining one. Bullard talks in the attendant slides about a "new steady state equilibrium," when in fact the manipulation of money and credit flows and of rates have a propensity to thwart that assumption.
    21 May 2013, 01:18 PM Reply Like
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