Today will mark the end of the "Grand Experiment", but it may not have been so grand and it is certainly not an experiment after 71 months of near zero interest rates. Many are saying that the naysayers got it wrong, there has been no inflation as expected. It is true that inflation did not rise above the 2% target but it has stayed above the rest of the developed world. The EU and Japan both are fighting deflation fears.
There is better growth in the US. The housing market has come off the lows of the Great Recession. Mortgage rates make buying real estate cheaper. The stock market has created a lot of wealth for those who hold stocks. Credit spreads and absolute rates make it cheaper to finance if you are a corporation. The banking sector is in better shape. Government financing costs have declined significantly.
All of these key financial and economic areas show improvement, but the real question is how much worse off would be have been if less was done and rates were starting to be normalized. It is always an issue of behavior on the margin. QE was a good thing to get an economy back on track but does a good thing become a grand thing if you just do more?
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