(WEEKLY STANDARD)
By Irwin M. Stelzer
So it’s come to this. The monetary policy gurus at the Federal Reserve have decided to reduce the size of the bank’s swollen $4 trillion balance sheet in a gradual process—initially $10 billion per month, rising steadily thereafter.
Economists at the Lindsey Group estimate it will take until 2023 to complete the process, unless conditions change. Fed policymakers are debating whether the six-year wind-down should begin in September or December.
This dance of the monetary angels on the head of a pin ignores some unpleasant truths. Long before the policy plays out there will be one, and perhaps two, new Fed chairs, a few twists and turns of fiscal policy, several share price paroxysms, completion of Britain’s exit from the clutches of the eurocracy, a show-down with North Korea, and a complete upheaval in America’s important auto industry as self-driving electric vehicles take over the market for new vehicles. To mention just a few “known unknowns.”
