Weekly Wrap: QE3 and its effect on the economy
Catherine Rampell from the New York Times and Sudeep Reddy from the Wall Street Journal wrap up this week’s business headlines.
On how the Fed’s decisions will affect jobs in the U.S.:
Sudeep Reddy: Ben Bernanke is making a fairly simple bet: He’s betting that a stable stock market is going to better for the economy than a collapsing stock market, and lower mortgage rates are going to be better than higher mortgage rates at this point. And he’s hoping that all of this will boost confidence and give people more money to spend, which in the end can boost job creation. There’s some evidence to support both of those points, but he also seems to realize that this isn’t going to really solve our problems. He was practically begging us yesterday when he was talking to acknowledge that the Fed can’t fix our underlying problems.
Catherine Rampell: The Fed has already pumped a lot of money into the economy, has already put interest rates at subterranean levels at this point. And if those interest rates aren’t low enough now to get people to borrow money, it’s not totally clear that it’s going to have a huge effect going forward.
For more analysis, listen to the full audio above.
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