The Fed has failed to meet it's price stability mandate for nearly half the time elapsed since it launched the first round of QE in late 2008. Net of intra-period fluctuations (which were worse), all three formal rounds of QE saw the long end of the curve rise rather than fall. In fact, only after LSAP balance sheet expansion ended did rates drop; and precipitously. Net of these interstitial periods, we can plausibly conjecture rates would be far higher than they are now.
So, would a "data-dependent" FOMC launch QE4 to effectively cut rates (again)? Yes; but (rather disingenuously) only for the purpose of ending it. Ironically, the ex post facto decline in rates observed after each round of QE has gone some distance toward accomplishing the Fed's goals for the programs; but - assuming the Fed hasn't undertaken a 6-year long subterfuge with its ever-evolving communications policy - by serendipity and blind luck rather than any policy acumen.
The Fed's post-crisis handiwork is on full display here: the Long Bond's yield is a monumental contradiction of the Bernanke/Yellen-era Fed's prevailing intellectual orthodoxy that it is the Stock effect rather than Flow that matters.
So, would a "data-dependent" FOMC launch QE4 to effectively cut rates (again)? Yes; but (rather disingenuously) only for the purpose of ending it. Ironically, the ex post facto decline in rates observed after each round of QE has gone some distance toward accomplishing the Fed's goals for the programs; but - assuming the Fed hasn't undertaken a 6-year long subterfuge with its ever-evolving communications policy - by serendipity and blind luck rather than any policy acumen.
The Fed's post-crisis handiwork is on full display here: the Long Bond's yield is a monumental contradiction of the Bernanke/Yellen-era Fed's prevailing intellectual orthodoxy that it is the Stock effect rather than Flow that matters.