Earlier this year the Fed was all about mapping the way out of their unusually accommodative monetary policy; the “exit strategy” was all the rage. But then the economy became “unusually uncertain”. That’s how Bernanke phrased it in his semi-annual congressional testimony in July and almost from that point forward the Fed began to circle back. Instead of taking a nearby exit to normalization the Fed is now intent on moving further down the road of accommodation. The policy pivot was as swift as it was utterly complete and we shall not be hearing about a strategy to exit for a long time to come. Here is a brief timeline of the path to QE2.
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