From the FT:
"Larry Fink, founder of investment and advisory firm BlackRock, believes the point of QE is to help support share prices.
“Both Bernanke and Greenspan believe in the wealth effect of equities,” he says. In spite of the efforts of the Fed to get Americans to go into riskier assets, however, most are still risk averse and, if anything, have been shunning stocks for bonds and cash.
Kenneth Rogoff, a Harvard professor and former International Monetary Fund chief economist, puts it differently. He likens the Fed’s predicament to a golfer stuck in a sand bunker. Tap lightly and the ball will not get out of the hazard. “I would say: ‘I am now going to slam the ball and I don’t know where it is going to go but if it ends up on the fairway I am going to hit it towards the hole,” he says of the Fed’s next step.
The Fed, argues Prof Rogoff, should announce what it wants inflation to be, admit that it could overshoot the targeted level but commit to act aggressively to rein in inflation again should that happen. “The important thing is to say you are not going to stop QE until you achieve your inflation target.”"
