After embarking on a third round of easing last year that only involved extending the length of its zero rate policy and changing the Fed's Treasury portfolio duration mix, the Fed has recently started QE3 with an even more aggressive tone. It is now targeting the unemployment rate, communicating its commitment to accommodation even after the US economy has picked up. And to do this, it will lengthen asset maturities, buy mortgages, and extend the zero rate policy. This is very aggressive in my view.
Just over a week ago, Federal Reserve Board Chairman Ben Bernanke gave a full-throated defense of the Fed's continued accommodative monetary policy stance, saying "we recognize that unconventional monetary policies come with possible risks and costs; accordingly, the Federal Reserve has gen...
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Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator in print and on television for the past decade. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.