Josh Barro celebrates QE3:
While overly tight monetary policy has hit the unemployed the hardest, it has been bad for almost everybody, including rich people. It’s true that disinflation has been good for certain securities, particularly low-risk bonds. But wealthy bondholders also tend to be wealthy stockholders, and Fed policies that hold economic growth down are bad for equities. Most advocates of hard money are simply making a mistake, not putting their interests ahead of the common good.
Felix Salmon thinks "the real innovation here is that the Fed is moving aggressively into the world of words rather than deeds" by not just buying bonds but "trying to boost the economy by promising to continue buying bonds":
None of this is going to make any noticeable difference before the presidential election: it’s all marginal, really. But if it seems as though QE3 is having a bit more of a real-world effect than QE2 did — if, that is, it helps the job numbers rather than just the markets — then the lesson will be clear. The Fed’s balance sheet is a powerful tool to use — but its vocal chords might be even more powerful still.
Derek Thompson adds:
Bernanke essentially said: I'm going to keep my foot on the gas even after the economy starts to recover. Good economic reports or bad, the Federal Reserve will be working to keep interest rates low "for a considerable time after the economic recovery strengthens." We don't know what impact this will have on the housing and jobs market. But we're all about to learn the value of a Ben Bernanke promise.
(Photo: Chairman of Federal Reserve Board Ben Bernanke speaks during a news conference on September 13, 2012 in Washington, DC. Following a two-day Federal Open Market Committee meeting, Bernanke presented the FOMC’s current economic projections and provided additional context for the FOMC’s policy decision. The Federal Reserve announced it will purchase additional agency mortgage-backed securities at a pace of $40 billion per month to support a stronger economic recovery and to help ensure that inflation is at the rate most consistent with its dual mandate over time. By Alex Wong/Getty Images)