The Clear Evidence That QE FAILS To Produce Jobs

Over the last five years, the US Federal Reserve has substantially changed the investing landscape of the capital markets in the last 12 months. In particular we need to assess how ongoing QE programs affect notions of “risk” and rates.

In the period from March 2008 to late 2013, the Federal took a series of strategic steps to attempt to rein in the financial crisis and to support certain financial institutions that it deemed most critical to the health of the financial system.

These steps consisted of cutting interest rates to zero and engaging in rounds of Quantitative Easing, commonly referred to as QE.

QE in its simplest form consists of printing new money that is then used to buy US debt, called Treasuries. The Fed has made a myriad of claims for why it did this (to help housing, the help the economy, etc.) but the blunt reality is that this policy was primarily a means of financing the US deficit, which swelled in the post-2008 period as the public sector expanded rapidly in an effort to pick up the economic slack in the private sector.

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