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HE doesn't make the decision. He's not even a member of FOMC (which makes decisions regarding QE) so he doesn't even get a vote. He's just voicing his opinion. Bullard has always been pro-QE. Other members of the Fed are anti-QE. Just like us on this board, the members of the Fed have their own opinions and are rarely in complete agreement - but folks listen to ALL of them.
Ken
Did you read the article? His wasn't the only opinion.
Yellen has been saying the same sorts of things.
Chair Janet Yellen says economy still needs Fed support
I don't understand. The markets are at record highs but they still need support?
"Fed support" is MORE than just QE.
I've said all along that interest rates will remain low for quite some time (as has the Fed) - but QE will end.
QE is very specific. It is asset swaps. It's one of the ways in which interest rates are kept low. The Fed will end QE - and interest rates will possibly rise slightly but not much because the Fed will keep the "overnight rate" very low and use it's other tools to keep rates from rising too fast. The Fed ALWAYS manipulates interest rates through a number of different means - that's a big part of IT'S JOB. There's nothing new about any of that. Under Reagan the Fed allowed interest rates to rise as a means of fighting inflation (and it WORKED). Under Bush/Obama the Fed drove interest rates very low as a means of getting money moving again (and it WORKED).
That's what the Fed DOES.
As I've said all along in this thread, it doesn't matter what they call it. It's all the same. It's the Fed artificially propping up the markets.
Quote:
I've said all along that interest rates will remain low for quite some time (as has the Fed) - but QE will end.
QE is very specific. It is asset swaps. It's one of the ways in which interest rates are kept low. The Fed will end QE - and interest rates will possibly rise slightly but not much because the Fed will keep the "overnight rate" and use it's other tools to keep them from rising too fast. The Fed ALWAYS manipulates interest rates through a number of different means - that's a big part of IT'S JOB. There's nothing new about any of that. Under Reagan the Fed allowed interest rates to rise as a means of fighting inflation (and it WORKED). Under Bush/Obama the Fed drove interest rates very low as a means of getting money moving again (and it WORKED).
That's what the Fed DOES.
Ken
Yes, Bernanke said things were going great right up until it imploded. (driven by low interest rates) Without the low rates the housing bubble doesn't get created.
Yeah, like people buying into the market AFTER a plunge to secure bargains - happens time and again.
There's NO WAY to know for sure WHAT caused the reversal.
NONE.
As I said, Bullard doesn't even get a VOTE in the decision on whether or not to end QE so his opinion is not really that relevant.
Ken
Bolded for emphasis on the meaninglessness. Oh sure tons of people have money laying around after there is a crash. Because they didn't invest in the market to start with and just happened to have that money in savings. People save their money all the time right?
Bolded for emphasis on the meaninglessness. Oh sure tons of people have money laying around after there is a crash. Because they didn't invest in the market to start with and just happened to have that money in savings. People save their money all the time right?
As I've said all along in this thread, it doesn't matter what they call it. It's all the same. It's the Fed artificially propping up the markets.
.
The fact that YOU may not understand what QE is (and isn't) is not my problem. It's just indicative of your ignorance on the subject. QE is a very specific thing. It's not simply "whatever the Fed does". Anyone who makes that claim is clearly ignorant of economics. QE is a very exceptional thing that's been done very rarely - and only under dire circumstances. It's not just the Fed setting interest rates by setting the overnight rate or prime rate (which is part of what the Fed normally does). QE was a means of driving interest rates even lower than was possible using simply the prime rate or the overnight rate. The end of QE simply means this exceptional effort is deemed no longer necessary in order to keep money moving. It doesn't mean that interest rates will suddenly skyrocket. It just means that they won't be as low as they are TODAY. They'll still be kept low for the foreseeable future through conventional means however - but QE itself will no longer be used. That particular tool will be "put back on the shelf". QE is a tool that was used to help boost the housing market and get money moving again in the overall economy. It has done that. It's time to end it - and the Fed WILL
Does the Fed affect the stock market with all this manipulation?
Of course it does (along with affecting many other things) - because it controls the cost of money - that's what it was DESIGNED to do. The Fed was created to help avoid the constant roller-coaster of boom and bust cycles that existed before it. It has not been completely successful in that, but anyone with a knowledge of economic history of the 1700s and 1800s knows that such cycles were FAR more fequent before the creation of the Fed than after.
By and large the Fed has done what it was meant to do - not always of course, as the 2007/2009 Great Recession shows - but certainly the fequency of booms/busts has been reduced significantly.
Ken
Last edited by LordBalfor; 10-17-2014 at 10:13 PM..
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