“In the light of these uncertainties the committee decided to await for more evidence that the recovery’s progress will be sustained before adjusting the pace of asset purchases” Ben Shalom Bernanke, Chairman of the Federal Reserve
Thus spake Mr. Bernanke rationalizing why the taper of quantitative easing (QE) was off.
Reasons Given For Not Tapering:
We Need More Data to Confirm the Recovery is Progressing
The Fed is still trying to hold out the pretense that QE has been a success in bringing about a “recovery”. As we have pointed out there really has never been a recovery other than one as measured in rising house prices and a roaring stock market.
The Fed claims it needs to wait to see more evidence of a non existent recovery before scaling back its buying of $85 billion a month of U.S. Treasuries and mortgage backed securities (MBS’s). This is as dramatic of an admission as the one that Mr. Bernanke made back in June when he said the economy “the economy is weak, inflation rates are low, if we were to tighten policy, the economy would tank”.
Here Mr.Bernanke is again, three months later, having spent yet another $255 billion, saying the economy is STILL weak and needs the $85 billion a month support of QE. This should be a slap in the face to all those recovery addicts who have been touting economic recovery for the past few years.
If the economy is in a recovery why does the Fed need to continue to print/spend over a trillion dollars a year to support it?