Pessimistic Bernanke Fed Admits QE Has Failed In FOMC Statement
forbes.com
The Fed, headed by Ben Bernanke, has finally given up on its optimism, and accepted that it has failed to put the economy back on its feet. “They have realized that anticipated inflation for early 2012 isn’t going to happen,” explained Frank Fantozzi, CEO and chief investment strategist of Planned Financial Services. “[They’ve accepted] that we only received supply-side inflation from raw materials,” said Fantozzi.
“The Fed’s hands are now tied, they don’t really have any additional tools at their disposal,” added Fantozzi, noting “they can’t really do more than be a cheerleader, be pragmatic, and commit themselves to stability.”
Pledging to keep rates “exceptionally low” through at least mid-2013, the Fed has admitted that it expects the economy to need extra-loose monetary policy for at least two years. While some had expected stronger language from Bernanke, hinting at some sort of monetary stimulus, not going as far as QE3, the Fed has also showed that it hasn’t been effective at managing expectations. |
