Why is Quantitative Easing Back on the Menu?

Why Is Quantitative Easing Back on the Menu?

The Federal Reserve cut interest rates and spent $4.5 trillion in “quantitative easing” during the aftermath of the 2008 financial crisis. Now that interest rates are already low, Fed Chairman Jerome Powell has warned that during the next financial crisis, the Federal Reserve might have to rely even more heavily on quantitative easing. Experts believe…

Federal Open Market Committee abbreviation on top of stacks of silver and gold coins

FOMC Fallout: Here We Go Again

As I write this morning, gold has given up two-thirds of its gains following the Fed’s decision last Wednesday to continue its $85 billion-a-month in bond purchases under QE3. One reason for this retreat is that markets overreacted to the news, just as they did back in June when Ben Bernanke’s statement about QE3 was misinterpreted as a signal the Fed would cut back QE3 in September. Buckle your seat belts; we’re in for many more days like Wednesday in the year ahead…