Beyond Appeasing Investors, Is There a Point to QE3?

Fed Chairman Ben Bernanke starts speaking to Congress this morning at 10 a.m., and investors will be listening closely for any allusions to a new round of quantitative easing or other aggressive Fed action.

Here’s something to consider as he speaks.

Ian Shepherdson, chief economist at High Frequency Economics, notes this morning that quantitative easing has already achieved its purpose:

“The primary objectives of the Fed’s asset purchases — spoken and unspoken — were to drive down long-term interest rates, boost the prices of risk assets, weaken the dollar, support banks’ balance sheets, and remove the fear of deflation. All these objectives have been achieved — the week before QE1 was announced on Nov. 25 2008, 30-year mortgage rates were 6.404 and the S&P 500 stood at 814 — and it is hard to see much incremental benefit from another round.” (italicization by Shepherdson)