QE is over – what now for Fed?
Following on from Merle Hazard’s Dual Mandate song, here is a report from Paul Solman of PBS looking at the role of the Federal Reserve with the end of its QE money creation programmes. The US economy is still in recovery mode and the role of the Federal Reserve is being debated. While most central banks have one mandate – price stability – the US Fed has two:
1. Maintaining stable prices
2. Full employment
Paul Krugman doesn’t think the Fed is achieving either of their mandates and would have liked to have seen them continue their bond buying last longer since employment rates and wages are still depressed.