Bernanke seems to discount the value of QE. If short-term rates are already at zero, and the Fed can't impact longer-term interest rates, then QE would have no

Bernanke seems to discount the value of QE. If short-term rates are already at zero, and the Fed can't impact longer-term interest rates, then QE would have no effect. But in fact, after the Fed pegged the overnight rate at 0, they could peg the 7-day rate at 0 just by committing to keep the overnight rate at 0 for 7 days, and offering to lend 7-day money at 0. And they can then peg the 1-year rate by offering to buy and sell 1-year T-bills at a given price. And so on up the yield curve. Of course, at some point inflation adjusts and the Fed can't peg the real rate over the long term. But in the short term they can peg a lot of nominal rates in a sense that is not as narrow as he lets on here. http://ftalphaville.ft.com/2015/03/30/2125256/did-bernanke-forget-about-qe/ http://ftalphaville.ft.com/2015/03/30/2125256/did-bernanke-f...