Tomorrow I'll have a post summarizing the Fed's extension of Operation Twist and the newly crafted QE3 and what I believe to be the merits/criticisms of these programs.
First, I'll be looking at the market's response to Ben Bernanke's speech detailing the extension and initiation of these programs. Second, the political dynamics of The Fed's policies. In particular, it is important to analyze whether or not the Fed's policies are political or not (spoiler alert: they're not), and the possible backlash the Fed might face in the near future. Personally, I believe the Fed should remain as independent as it is right now, perhaps even more some in relation to Congress. Finally, I'm going to delve into the debate surrounding the Fed's dual mandate: controlling inflation & maintaining acceptable levels of employment. Are these mandates fundamentally at odds with one another? Is there a better indicator to watch for inflation than the Consumer Price Index? What supplementary efforts should Congress pursue that would help the Fed maintain acceptable levels of employment? For example, what can Congress do to help the labor force acquire skills that are needed for growing industries?
I'll be writing all day so leave some suggestions that I have not included.
