QE4 will be as useless as the other QE's and the FED knows it. It's all about interest rates. The US deficit, politics and debt means that fiscal improvement is impossible and so what does that leave?
That is the $64 question. Stimulus via ZIRP has puffed up equity markets so now the only way out (or up) is to tamper with the ZIRP.
Raising rates increases the cost to business and consumer alike while not raising inflation as does going into negative rate territory. Just like this week with Westpac, banks have to fund existing portfolios and negative rate pressure, which is the inverse of what happened this week, can raise deposit rates and make loans dearer.
I'd call this the ZIRP trap which looks increasingly like where the FED is heading............. and the RBA
