The only tool left for the US is to drive their currency below their competitors. The US central bank will continue to print on any major market weakness until the US dollar index (DXY in graph below) returns to the 80 level. It is the only way they can rebuild their industrial base IMO.
Of course every other country will compete hard with the US to drive down their currencies. Over a sustained number of years, this global printing press will eventually lead to inflation expectations gradually rising, which will cause the long end of the yield curve to rise, with the short end tagging along for the ride.
The US has created the mother of all moral hazards. Any major market weakness will elicit the printing presses to be dialed up. They are signalling to all and sundry that debt will be dirt cheap for perpetuity. That private risk is no longer a concern and has been transferred to the public.
Why if the federal reserve is not concerned about debt, why should the average business and household? That is the signal being sent.
