Is the FED policy of leaving the interest rate at .25 by not understood
USA economy has improved, QE3 is still in place at $85 billion per month, this is a far cry from 333 billion a month from QE1 in March 2009.
Is there a tightening bias right now? or is there a losening bias? or is the policy of leaving the interest rate at .25 by the FED not understood. The FED said no interest rate increase until USA unemployment rate is a 6.5%, this seems to be misunderstood by CNBC as they air comments like "maybe","imagine","we dont know" what the FED will do, since the current unemployment rate is around 7% this implies CNBC cannot read. Well let me tell you what the FED will say" qe3 continues at current pace". they will do it until the unemployment rate is at 6.5%. CNBC says "they dont think the FED thinks about the stock market", really? stocks are in an asset class, stocks are included in M2 money supply, I think CNBC should just report the facts and stop "thinking".
The FED will need to see a couple of monthly job gains in the order of 275,000 per month, then it would be time for the FED to budge on raising rates by lowering QE3 . Relax CNBC is trying to make "tapering" scary, but it is actually a good thing.