My goodness, we have such huge budget deficits, say the deficit hawks and bond vigilantes (who sing the same basic tune). Because deficits continue to grow, inflation is just around the corner. This means their thinking is even scarier.
Analysts will be hard pressed to explain how equity markets ended unchanged on the day of an unprecedented policy announcement from the Fed. An answer can be found by considering the competing emotions a patient feels when confronted with a new drug that has yet to go through clinical testing.
Probably the most convincing evidence that Quantitative Easing works is the revival of housing sector. Economists agree that the collapse of housing values is a major deterrent to consumer spending. Housing could finally begin to recover this year.