Since the recession began in September of 2008, the FED has pumped about $2 trillion into the economy through the purchasing of long-term assets like mortgages and treasury bonds, in an effort to lower interest rates and encourage spending. As the election draws near, it is becoming ever so clear that the FED will prepare to continue its trend - more purchases may be on the way. Ben Bernanke commented on Monday on the possibility of future purchases, "I do think they have the ability to ease financial conditions."
This continued action comes with great risk, the greatest one being that the cost does not outweight the gain. Many economists, and I agree, believe that little to nothing will change in the current state of the economy. Capital has become cheap, and even with the near zero interest rates, banks are still not loaning out any money. Lowering rates even further will do nothing to change the current mindset; consumers are concerned about paying down debt while employers and banks are holding onto their cash. The FED's policy could lead to high inflation down the road with little to no trade off in unemployment.
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