Fed Cuts Stimulus On Indicators Of Activity Despite Anemic Q1April 30, 2014
While the U.S. economy grew by an anemic 0.1 percent in the first quarter of 2014, “information received since the Federal Open Market Committee met in March indicates that growth in economic activity has picked up recently.”
As such, the Fed is cutting its monthly stimulus spending by another $10 billion beginning in May while reaffirming its goal of keeping interest rates artificially low, “for a considerable time after the asset purchase program ends.”
Meanwhile, mortgage activity in the US is on the decline amidst the spring buying season, with purchase loan activity down 21 percent, year-over-year.
Comments from Plugged-In Readers
The current housing bubble was a direct and indirect consequence of the trillions of dollars of QE2 liquidity sloshing around, trying to find the biggest return, driving up assets into bubble territory.
The ebb of QE2 is now sucking the speculation out of housing. This will mean a return to a more normal market. However, since most of the economy is now based on QE2 asset inflation instead of production, there will hell to pay.
The solution, of course, will be to give the .01% trillions of dollars, to try to drive the assets back up.
What a clusterf&ck.
Comments are closed.