After sounding optimistic for months, the Fed is now reversing and saying that the economy is not doing so well, so more stimulus may be helpful. Since $2.3 trillion did not produce any results, more quantitative easing may be needed, is the thinking. Chairman Ben Bernanke has also established a target inflation rate which will erode savings and pension plans at a nice controlled rate.
This piece is posted on Reuters.
“”The framework makes very clear that we need to be thinking about ways to provide further stimulus if we don’t get improvement in the pace of recovery and a normalization of inflation,” he [Ben Bernanke] told a quarterly news conference.”
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