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acgeaux129
USA Fan
We are BR
Member since Sep 2007
15011 posts

Question for monetary policy enthusiasts regarding QE, inflation targeting


(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.








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OFWHAP
LSU Fan
Member since Sep 2007
4779 posts

re: Question for monetary policy enthusiasts regarding QE, inflation targeting


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.





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acgeaux129
USA Fan
We are BR
Member since Sep 2007
15011 posts

re: Question for monetary policy enthusiasts regarding QE, inflation targeting


quote:

Targeting 2% inflation?




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






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