With no apparent signs that the Federal Reserve’s aggressive stimulus is causing harm, the measures likely will continue despite persistent signs of economic recovery.
The debate over monetary policy may be a case, then, over not what Fed Chairman Ben Bernanke worries about most but rather what he is not worried about—mainly whether creating trillions of dollars will cause the runaway inflation that many critics expect to happen.
“Europe has stabilized, the (U.S.) economy is doing better, yet the Fed has this super-accommodative policy in place,” said Joe LaVorgna, chief US economist at Deutsche Bank. “It doesn’t make sense, but they’re stuck with it.”
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