Fed Big Wig Admits Ignorance

William Dudley, president of the Federal Reserve Bank of New York, admitted in a forum in Mexico that Fed honchos really don't understand how QE works, according to this article by Reuters. The initial monthly purchase of $85 billion in Treasuries and mortgage bonds, now reduced to $75 billion, may affect the portfolios of private investors or just send a signal. The real signal is that the Fed has only a limited range of therapy for the condition it has created itself.