The Doom Loop of Quantitative Easing

Ben Bernanke

Fed Reverses Exit Plans, Sets $2 Trillion Floor for Holdings - The Federal Reserve reversed plans to exit from aggressive monetary stimulus and decided to keep its bond holdings level to support an economic recovery it described as weaker than anticipated. Central bankers meeting yesterday adopted a $2.05 trillion floor for their securities portfolio, pivoting toward a quantitative target for monetary policy. Treasuries surged and stocks pared losses as some investors judged the decision opened the door to a resumption of large-scale asset purchases. “The Fed is cognizant the recovery has lost some momentum and it is still willing to intervene,” said Paul Ballew, a former Fed economist and a senior vice president at Nationwide Mutual Insurance Co. in Columbus, Ohio. “We always thought the exit strategy would be challenging. If you’re at the Fed, it’s proven to be more problematic than what you thought.” Read more here:

The Doom Loop of Quantitative Easing