Article Image
News Link • Economy - Economics USA

Milton Friedman Probably Would Have Supported Bernanke's QE3

•, James Pethokoukis
 A fascinating and instructive speech today on monetary policy from Ben Bernanke. The Fed chairman attempted to calm concerns about his open-ended bond-buying plan.

Bernanke denied he was enabling Big Government by monetizing the debt. Bernanke denied his actions would lead to out-of-control inflation. Bernanke denied he was trying to influence the political debate.

Bernanke also outlined just how the plan would boost growth:

We expect these purchases to put further downward pressure on longer-term interest rates, including mortgage rates. To underline the Federal Reserve’s commitment to fostering a sustainable economic recovery, we said that we would continue securities purchases and employ other policy tools until the outlook for the job market improves substantially in a context of price stability.

In the category of communications policy, we also extended our estimate of how long we expect to keep the short-term interest rate at exceptionally low levels to at least mid-2015.

Join us on our Social Networks:


Share this page with your friends on your favorite social network: