Tag Archives: monetary policy

Of Course We Won’t Have QE3

The Fed has done its job; and monetary policy has run its course. However, the economy is still soft and requires additional support–that is, more fiscal stimulus. The budget proposal in which every dollar the debt ceiling is raised, there will be as much or more cut from future spending, seems rather appropriate. It allows for the continued near-term support the economy needs, yet addresses the long-term structural issues. This is the only measure that will be helpful to today’s economy. But depending on the resolution of this issue, the Federal Reserve, in an act of desperation, may attempt to replace the lack of fiscal response. This may include an extended-extended Fed Funds Rate or some other plan that has not yet been laid out. It is very unlikely additional monetary measures will be effective. The economy requires an extremely long time to heal and tough choices need to be made at inopportune times. Continue reading

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