No Taper in Sight
The economy grew 6.1% last quarter, unemployment continues to fall, and job openings are up. And the Fed continues stimulate the economy; its balance sheet continues to grow. As of June it exceeded $8 trillion, a once unthinkable sum. There is talk of talking about ending Quantitative Easing later this year. But even if it does, the Fed is expanding its assets in other ways. The Fed has become such a large player in the fixed income market, it is unclear what the consequences will be or if the Fed can even conduct contractionary monetary policy any more without causing large disruptions to the bond market.
Allison Schrager is a senior fellow at the Manhattan Institute. Follow her on Twitter here.
Interested in real economic insights? Want to stay ahead of the competition? Every Wednesday, e21 delivers a short email that includes e21 exclusive commentary and the latest market news and updates from around the Web. Sign up for the e21 Weekly eBrief.
Photo by Liu Jie/ Xinhua via Getty Images