In fact, without this effect the decision put under pressure and the US budget. Rising interest rates will raise the costs of the US government in service of the mountain by nearly 22 trillion. dollar debt. Low interest rates also had another effect – scored in the freezer deteriorating private debt and kept many otherwise practically bankrupt businesses and households live. Going the other way is tantamount to kick-up at the door, which, after the degree rise may again spread the rotten smell. The idea of longstanding distribute free money banks say they had to invest to win and be able to accumulate enough capital to be able to withstand these losses. However difficult to assess whether it was enough.
Of course, if you feel that some of these risks are rising, the Fed could theoretically stop and even reverse their actions. However, this will only happen at the cost of loss of confidence. Fed measures have so far been so successful precisely because markets assume that things are under control. If their predictions are wrong and they have to change policy knee, this can not be right and came criticism that the decision has not been taken too late (so they inflate balloons) or too early (and the economy recovered). A more likely both. Moreover, it will make any further attempts to return to normality more complicated.
Despite tightening actually balance the Fed remains bloated and full of unusual instruments bought over the years. And they do not reduce by maturity resulting cash is reinvested. Signals according to the UBS analysts are that at least until 2017 this will continue to be so and the balance will begin to shrink by stopping purchases and even more unlikely by asset sales. And there’s a reason – if true tightening begin Jedi tricks will stop working and the markets will be forced to watch what is happening in the economy. And do not throw all their efforts to anticipate how central banks will at least treat diseases or symptoms.