QE as recovery plays out,
And joblessness wanes
(Though the latter remains,
Admittedly, still quite a ways out)."
The Fed open market committee ended its latest two-day policy meeting with little change in the wording of its announcement from those of the last few meetings. That means that the extraordinary policies – such as quantitative easing – meant to combat deep recession and unemployment will remain in place for the foreseeable future. In comments to the press after the announcement, Chairman Ben Bernanke emphasized the "variable" plan in place to unwind the Fed's $85 billion monthly purchases of mortgage bonds and Treasuries. However, the implementation of that plan requires the economy to move beyond "partial" and "modest" recovery into one that "can be sustained for a number of months."
The Fed has previously pegged an unemployment rate of 6.5% as the level at which QE may safely be unwound. However, its own forecast calls for a rate of between 7.3-7.5% this year, leaving some doubt as to whether the ending of easing will precede the ending of Mr. Bernanke's term in 2014.