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Whether it works or not, QE3 was needed

Commentary: US not in recession, but fiscal cliff, Europe still loom

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One thing is for sure. Mr. Bernanke's announcement yesterday is the most extraordinary to come out of the Fed since the all-time previous: Paul Volcker on Columbus Day weekend 1979 said the Fed would allow interest rates to rise as high as necessary to defeat inflation. As today's problems are the polar opposite of 1979, and raising rates had long been the accepted and effective remedy for inflation, and Mr. Volcker's policies succeeded in solving the problem, it is difficult further to compare these two moments.From yesterday's announcement by the Federal Open Market Committee: "If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of agency mortgage-backed securities, undertake additional asset purchases… until such improvement is achieved in a context of price stability." The committee "expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time aft...