Fed’s Bizarre Tactics Target Weaker Dollar

Is the Federal Reserve (Fed) experiencing a midlife crisis? Ever since Fed Chairman Bernanke gave a speech in Jackson Hole, Fed behavior can be summarized as, well, bizarre. According to Bernanke, the market’s inflation expectations may be too low. He considers three possible remedies: Conducting additional purchases of longer-term securities (quantitative easing); Modifying the Committee’s communication; Reducing the interest paid on excess reserves. Here’s the problem with quantitative easing: even many on the Fed’s Open Market Committee (FOMC) doubt it will necessarily boost economic growth. What types of projects promoting economic activity will be initiated when extremely low interest rates are lowered further? One might argue that the problems faced by the economy is not that interest rates are… . . . → Full Story: Fed’s Bizarre Tactics Target Weaker Dollar