This past week, during her Congressional hearing as President Obama’s nominee to become the next chair of the Federal Reserve Board, Janet Yellen said, “QE cannot continue forever.” The market moved higher.
Both the current Fed chair and his assumed successor assured us that the party’s not over, that there are still plenty of bonds to be bought.
But “forever” seems farther away now that it was back in May.
Ms. Yellen made it clear during her hearing that there’s still plenty of work for QE to do. Citing high unemployment, she said, “It is important not to remove support, especially when the recovery is fragile and the tools available to monetary policy, should the economy falter, are limited.”