Tags: Ron Insana | criticism | Federal Reserve | groundless

Ron Insana: Criticism of Fed's Easing Program Is Groundless

By    |   Tuesday, 15 July 2014 09:48 AM

CNBC contributor Ron Insana isn't too impressed with those who are criticizing the Federal Reserve for its massive easing operation.

"The fact is, the very critics of the Fed, who claim the Fed doesn't know what it's doing, haven't even the foggiest idea of why the Fed might be wrong," he writes on CNBC.com.

"'It's all artificial,' they say. 'The market is on a sugar — or crack — high! How can they exit without destroying the world?' All questions, no answers."

Editor’s Note:
Dow Predicted Will Hit 60,000 — Buy These 4 Stocks Now


Insana thinks the central bank is doing a good job.

"Unlike many others, I see great hope, and considerable evidence, that the Fed knows exactly what it is doing and has a clear, and well-designed, plan to unwind the [easing] program once it is satisfied the desired results have been achieved," Insana notes.

The Fed should be given credit for a carefully-planned strategy that has "successfully aided the economy's recovery, lifting asset prices and preventing deflation from setting in," he writes.

The central bank has kept its federal funds rate target at a record low of zero to 0.25 percent since December 2008. And its balance sheet has mushroomed to a record $4.4 trillion.

Some economists, including those at Goldman Sachs, have advanced their prediction for when the Fed will start raising interest rates, given recent strong economic data. Goldman pushed up its forecast to the third quarter of 2015 from the first quarter of 2016.

Goldman adjusted its projection amid "the cumulative changes in the job market, inflation, and financial conditions over the past few months," Jan Hatzius, the firm's chief economist, writes in a commentary obtained by MarketWatch.

Editor’s Note: Dow Predicted Will Hit 60,000 — Buy These 4 Stocks Now

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CNBC contributor Ron Insana isn't too impressed with those who are criticizing the Federal Reserve for its massive easing operation.
Ron Insana, criticism, Federal Reserve, groundless
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2014-48-15
Tuesday, 15 July 2014 09:48 AM
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