Exit Strategy Likely Exceedingly Challenging

The Federal Reserve’s quantitative easing efforts of recent years, while effective at stemming the 2008 financial crisis, may actually hamper the longer-term health of the U.S. economy, CME Group Chief Economist Blu Putnam said.

Exit strategies from the Fed’s large asset purchases under the so-called QE programs “may be extremely challenging to implement and have the potential, if not the certainty, to delay a return to the normal conduct of monetary policy to the detriment of longer-term economic growth, currency values, and potential future inflation,” Putnam wrote in a new report.

“The long-term costs to economic activity and financial market stability of QE have the potential to be quite large,” he said.

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