QE Discussion Misses the Point.

As Fed mouthpieces try to undo the damage done by suggesting that QE would end or be tapered soon, the discussion misses the point.

The increase in excess bank reserves parked at the Fed since the start of this year approximates the total of 2013 QE ($85 billion/month.)   Excess bank reserves last week were $1.922 trillion. The issue is not money supply but getting that money out of the Fed parking lot by making loans.

QE dollars from the Fed is still at the Fed but now under the control of banks.  That is the only difference.

Increased regulation (Dodd-Frank and Basel III) and have discouraged lending.  Getting those excess reserves working is 20 times more important than increasing excess reserves through further QE.