Bill Dudley, the New York Fed President, had some very truthful comments re QE.
“We don’t understand fully how large-scale asset purchase programs work to ease financial market conditions, there’s still a lot of debate …” he said. “Is it the effect of the purchases on the portfolios of private investors, or alternatively is the major channel one of signaling?”
It seems as though the Fed has lost touch with what QE was intended to do and the actual outcome. Too bad it has backed the country (and other countries that are trying to keep up with QE) into a corner.