• US data trends highly encouraging
  • Recovery has slowed but not faltered
  • Fed must focus on long-term goals, not short-term targets
  • Legitimate reasons to be cautious quantitative easing
  • Buying $500 bln in Treasuries may not even lower rates 10 bp
  • Dumping another trillion into the economy likely to have little impact on economy, stocks
  • Second round of QE could undermine Fed independence
  • Further QE risky, could lead to 4-5% inflation
  • Fed should consider ending reinvestment of maturing securities
  • Remove low rates for extended period commitment, hike rates to 1%

KC FED president Hoenig continues his quixotic quests to hold back the coming tide of quantitative ease. Good luck with that, Tom…