The "FED"

In today's "Opinion Section" of the Wall Street Journal, entitled, "Doubling Down on Zero," is a succinct narrative on the Fed's continuation of its "Zero Interest Rate Policy."  An excerpt from the article is as follows:
  
"The Fed's QE2 experiment, which began last September, ended on June 30 with little to show for it. Asset prices rose as the Fed's bond purchases pushed investors into riskier assets (stocks and commodities).  But the prices of those assets have since fallen back down to what investors think they're worth.

The Fed had hoped that boosting asset prices would create "wealth effects," or an increase in spending that accompanies an increase in perceived wealth.  But the Fed can't dictate which asset prices will rise, and liquidity flowed into commodities as well as stocks.

Thus any wealth effect was offset by negative "income effects" as Americans suffered a decline in real income from paying more for food and energy because of the commodity-price bubble.  Economic growth has decelerated over the past year despite QE2, so we wonder what good Mr. Bernanke thinks it did. We're hard-pressed to see what good QE3 would do as well.  But, we will probably find out when QE3 happens that the outcome is the same."