“Continuing assessment of the efficacy and costs of asset purchases might lead the Committee to decide at some point to change the mix of its policy tools while maintaining a high degree of accommodation.”
-Minutes of Federal Open Mark Committee – October 29-30, 2013
The above text is the most important aspect of the most recent Federal Open Market Committee (FOMC) meeting that took place between October 29 and 30. The text is in no way novel as the sustainability of this economic stimulus program has always been of concern, and thus examining its long term benefits and consequences continues to be the focus of Federal Reserve officials. However, moving past analyzing the efficacy or cost of the program, it is the end of the above quote that is most telling. And that is that the misconception by the financial media of tapering Quantitative Easing meaning that the Fed is attempting to make their policy less accommodative. In fact to the contrary, it is not that their goal is to be less accommodative, but change the medium in which it is delivered.