We just got done listening to Ben Bernanke’s speech and Q&A at the National Press Club.
A couple things caught our eye.
First, in his speech he reiterated his line about how it’s going to be a long, long time before employment is back up to normal.
Then during the Q&A he was asked how he’ll decide whether more QE is needed after QE2 runs out.
His answer: The Fed will decide the same way it always does, by looking at various economic metrics (employment, the output gap, etc.) and decide whether the Fed needs to be more or less accommodative.
Put it together. QE2 is due to run out this summer. Unless you think we’re creating so many jobs in a few months, that it’s obvious that we’re on the right track to full employment, then more QE seems in the cards.