Here is our take on things. The FED has a dual mandate. Okay, so they need to keep inflation in check and do whatever they can to keep the unemployment rate at an amount that is considered to be low enough for the “full employment” level for the economy.

However, there is no empirical evidence that the monetary stimulus tools that they have used can or will impact employment in a meaningful way. While the massive stimulus they have poured on the U.S. (and other) economies has filled the hole left by the financial crisis, it has done little in the way of inflating assets – other than financial and commodities.

So, if the announce a new round of QE, they are risking additional inflation and if they don’t equity markets will be angry. With bonds trading near historic highs (yields at lows), the incremental benefit to the economy seems to be not meaningful enough to provide the bang for the buck.

So far, the European leaders have done their part to try and create a backstop and additional QE at this time appears to be premature.