Capital Market Review Compendium – May 2013

National GDP targeting, which appears to be the Fed’s implicit policy under QE3, is that relatively big mistakes in judging the economy’s potential real growth lead only to small changes in inflation. For example, if the economy’s trend real GDP growth rates were only 1.5%, instead of 2.5%, such a misjudgment would represent a large discrepancy as far as trend real growth predictions go. Read more. . .