QE’s Impact Coming to an End

The U.S. Federal Reserve’s huge quantitative easing programs are just a continuation of the government’s bailout on an unprecedented scale. The fact that it is all presented as part of the Fed’s official mandate to promote employment in the context of (undefined) price stability should fool no one. But it does. Markets apparently believe that the unemployment target of 6.5 percent is the loadstar to the Fed’s monetary policy.

Markets’ apparent belief? Yes, otherwise the bond market would be sinking. But it isn’t: the yield on the 10-year Treasury note remains below the 2 percent inflation rate.

All that makes it possible for the Fed to finance the government’s soaring debt at rock-bottom prices.


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