Former Fed Official Says QE Not Useful

There’s a real question as to whether the massive bond-buying program known as quantitative easing was worth the cost, former Federal Reserve official Andrew Huszar said Tuesday.

“My argument is not that QE was not at all useful,” he said on CNBC’s “Fast Money.”

“I believe that at the time, it was just one more tool that the Fed introduced to try to help the economy,” he said. “My point, ultimately, is the idea that very quickly into QE, it started becoming obvious that it wasn’t working in the way that it was supposed to.”

Huszar, a senior fellow at Rutgers Business School and a former managing director at Morgan Stanley, noted a few of the program’s unintended effects.

“I think the real issue is that the Fed has expanded its tool kit so dramatically, and really there are some real questions as to how potentially it unwinds, when it unwinds,” he said. “We saw this past summer there was this announcement of potentially a taper and the markets actually tanked, and after that the Fed backpedaled. What’s going to happen if we go on for months, years longer?”

Huszar apologized for his role in QE in a Wall Street Journal op-ed published Monday.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza