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VodkaPundit

It’s the End of Stimulus as We Know It!

July 8th, 2013 - 2:18 pm

Uncle Ben is going to cut you off any day now. Maybe. Eventually:

The Fed hasn’t committed to cutting back on its stimulus program; it has merely said it is “prepared” to reduce its bond purchases if the economy continues to look better.

Likewise, if the backdrop were to worsen in July and August, Fed Chairman Ben S. Bernanke could quickly signal that the central bank still isn’t ready to take its foot off the gas.

But for now, many Wall Street pros are leaning toward the idea that the Fed this fall will begin “tapering” its bond purchases. Instead of buying $85 billion a month, it may buy, say, $60 billion.

“The Fed will indeed test the taper waters, perhaps as soon as September, and the financial markets will need to continue to adjust to a post-QE3 environment,” said Scott Anderson, chief economist at Bank of the West in San Francisco.

Jim Pethokoukis called Friday’s jobs numbers a report “only a central banker could love.” We traded in 240,000 perfectly good fulltime jobs for 360,000 parttime jobs, as employers continue to deal with the fallout from ObamaCare’s now-you-see-them-now-you-don’t employer mandates. Obamanomics consists of transferring wealth from middle class savers to flush banks, from the young and healthy comparatively poorer to the old and sick and comparatively richer, and from one parttime fast food worker to the other.

Bernanke, I suppose, is doing what he can (or thinks he must) to keep this creaky machine going.

Good luck with that. We’re all going to need it.

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