Sep

20

 With the real estate market improving, stocks up, bonds up and unemployment declining (small but better then increasing), why did the FED decide to go forward with an unprecedented unlimited QE program?

My speculation is it's related to recent animosity of the republicans toward the FED and its future existence. By driving markets higher and driving mortgage rates lower via directly buying 1/3rd of the new issue MBS each month, the FED is helping to ensure Obama stays for a second term, helping to further diminish the threat of the republican party on the FED's autonomy and power. With no fiscal stimulus coming from the democrats they will need the FED more then the republicans. So perhaps the real reason for QE unlimited is self preservation.


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