I predict that the Fed will actually announce that it will reinvest some of the proceeds from the prior MBS investments as they come due, so there will be no net-tightening. What's more, that the Fed will see this as a major policy shift, but in reality it is far too little and it will do nothing.
However, I also see the economy getting better. Only, very, very slowly. Slowly enough that the Democrats will still get whacked this fall...
UPDATE: I hate it when I'm right!
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And the WaPo story on the Fed's action is still talking about inflation fears.
ReplyDeleteSome people complain and worry about things out of habit, without regard to whether the thing they complain/worry about exists. When those people set policy, we are in trouble.
The NYT article on the Fed's action was also TERRIBLE...
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