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Question for monetary policy enthusiasts regarding QE, inflation targeting

Posted on 11/9/12 at 3:01 pm
Posted by acgeaux129
We are BR
Member since Sep 2007
15011 posts
Posted on 11/9/12 at 3:01 pm
(ie, Benny)

Why are the recent easing/twist measures seen as aggressive or highly accommodative? In January, Bernanke established 2% as his target which isn't terribly high from both a historical and international perspective. From this standpoint, it doesn't even seem very stimulus-intensive at all, but the narrative, which is very much shaped by Bernanke's statements, says otherwise.

Posted by OFWHAP
Member since Sep 2007
5416 posts
Posted on 11/9/12 at 3:58 pm to
Targeting 2% inflation? Bernanke wants to avoid deflation, which would make it harder for everyone to keep paying their debts. If the Fed weren't buying up assets right and left, asset prices would fall off a cliff, which would dampen credit growth even further due to a scarcity collateral.
Posted by acgeaux129
We are BR
Member since Sep 2007
15011 posts
Posted on 11/10/12 at 11:53 am to
quote:

Targeting 2% inflation?




That's the target. Not sure if I worded it incorrectly or what.
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