End of QE

Today, the Fed announced that it would end quantitative easing, a policy they enacted in order to enlarge the money supply following the recession. However, interest rates will remain low. This policy, which was enacted to help stimulate the economy and consumer spending. The policy, which has been heavily criticized, was ended due to confidence in the economic recovery. For economists such as Paul Krugman, the end of QE would likely be lamented, due to his emphasis on stimulus from the federal government through both fiscal and (in this case) monetary policy. His likely argument would be that QE has ended too soon, especially given recent economic stagnation. Also, given the middling recovery the US has gone through since the recession, another Krugman argument would be that the response at first was too mild, and should have been much more comprehensive and radical. With the end of QE, however, the government and the Fed are both trying to instill confidence in the markets and consumers that the US has made a recovery, it may be a little premature, especially given all the economic issues which are in the immediate future for the US, namely the debt and Congressional gridlock's effects on federal fiscal policy, which has become a major issue in the Obama years. While I am not a personal fan of QE, if I looked at it from the Fed's/Krugman's perspective, I would believe it is ending too early, and upcoming economic uncertainty could easily slide the US back into recession.