Unprecedented FED Action

What we are talking about is not only what the FED did with QE2 and QE3 which ended yesterday.  What is unprecedented will be the effect on the economy if the FED really does let the 3.5 Trillion dollar Balance Sheet addition rundown as the bonds and other instruments mature.  We have heard that the average maturity date is  7 years.  In the past when the FED has increased the balance sheet they have not drawn it back to any large extent. See Chart here from Thechartstore.com again:

Fed Balance Sheet

 

And here is David Stockman’s take on the end of QE3:

http://davidstockmanscontracorner.com/good-riddance-to-qe-it-was-just-plain-financial-fraud/?utm_source=wysija&utm_medium=email&utm_campaign=Mailing+List+AM+Wednesday

As to the GDP number, it was bigger than expected by us.  Here is what Reuters said. ” A smaller trade deficit and a surge in defense spending buoyed U.S. economic growth in the third quarter, but other details of Thursday’s report hinted at some loss of momentum in activity.”

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