Quantitative Easing is debated as if it were a policy option that the Fed may or may not undertake.
QE is not an option; it is a necessity! It is necessary because the government is broke and cannot pay its bills. Furthermore, lenders will not buy enough Treasuries to cover the shortfall. That is why QE is certain. The Fed will be either directly or indirectly buying the bonds that no one else wants.
QE has nothing to do with stimulating the economy. It would be coming even if the economy were roaring along at 6%. There is no other option left for the government other than printing money. Actually there is, but does anyone seriously believe that the Clown Corps in Washington would stop sending out government checks (for social security, medicare reimbursements, etc.)?
Whether the Fed fesses up to QE or attempts to camouflage it is immaterial. The effects are the same, whether they call it QE or something else. One way they may try to camouflage it is by buying trash off bank balance sheets with the agreement that the banks buy Treasuries with the proceeds. A rose is a rose …!
As an aside, QE will not restore the economy. It will make things worse, much worse. The US (and most of the other welfare states in Europe) are in the advanced stages of the debt death spiral. Nothing can be done to prevent a complete economic collapse.
For those wondering why markets are going crazy, liquidity is anticipated and that generally drives financial assets upward — at least for a while. If you expect inflation (and recent reports show it rearing its ugly head), stocks are better than bonds, but neither will keep you even with inflation. For doubters, check out the stock market’s performance during the late 1970s.
Hang on, things are going to get very interesting and likely very quickly.
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