The Fed’s Best Rationale for QE3

Sept. 19 (Bloomberg) -- The basic case for the FederalReserve’s third round of quantitative easing is simple andairtight. The fine print is more complicated, and the Fed’sinability to explain itself makes this worse -- but don’t letthe details obscure the main point. QE3 was the right move.

The U.S. economy needs QE3 because it is suffering from adeficiency of demand and because the Fed’s policy interest rateis already at zero. It also is the right decision because theparalysis in Washington rules out the first choice under suchconditions: further fiscal stimulus.