In today's speech
by Richard Fisher, the Federal Reserve Bank of Dallas President, he warns that the market should not assume that QE2 is a done deal:
You should bear this in mind given the recent speculation about the prospect for further quantitative easing or the shape and nature of forward policy guidance: No decisions have been made on these fronts and will not be made until the committee concludes its deliberations at its next meeting on Nov. 3.
He also described the many issues of QE2 including the cost to savers:
In performing a cost/benefit analysis of a possible QE2, we will need to bear in mind that one cost already incurred in the process of running an easy-money policy has been to drive down the returns earned by savers, especially those who do not have the means or sophistication or the demographic profile to place their money at risk further out in the yield curve or who are wary of the inherent risk of stocks. A great many baby boomers or older cohorts who played by the rules, saved their money and migrated over time, as prudent investment counselors advise, to short- to intermediate-dated, fixed-income instruments are earning extremely low nominal and real returns on their savings. Further reductions in rates earned on savings will hardly endear the Fed to this portion of the population.
It's similar to Thomas Hoenig's speech that I mentioned on Saturday
. I'm glad there are some Fed members who acknowledge how the easy-money policy hurts savers.
Fisher is currently not a voting member of the FOMC. However, that changes next year.