Fed continues to defend QE

The Fed has undertaken somewhat of a PR offensive to try and rehabilitate the Fed’s reputation which has been savaged in the last two-odd years.

They’ve begun to defend QE quite aggressively, from the Chairman on down.

This afternoon, an executive VP at the NY Fed, Terence Checki told the Economic Club of New York:

Regarding the external implications of the policy, several points are worth keeping in mind. One is that the goal of policy is to stimulate demand in the United States by encouraging lower real yields. To be sure, the dollar has weakened of late, but as a side effect of policy, not as a goal, and not by more than might be expected in light of our recent slowing and recent changes in interest rates and inflation expectations. And as growth strengthens, the value of the dollar should adjust accordingly.

Much of his speech is a defense of QE, and can be read here.