As successor of Ben Bernanke, chairman of the Federal Reserve, Janet Yellen is predicted to continue the Federal Reserve’s spending policies to keep the economy stable. The Economist this month rendered a clear picture for the Federal Reserve’s plan going forward with respect to QE. With government shutdown on our minds, this article has come in a timely manner.
The concept of QE is simple, bottom line- it pumps money into the US economy to help keep interest and unemployment rates low. On the contrary, this adds to the deficit that the government has been griping about over the past couple of weeks. Looking forward- Does the Federal Reserve necessarily need to keep to its current spending policy to lead the economy along or should they let the invisible hand guide the US markets course?