As those bonds mature, the Fed is continually buying more to keep their balance relatively constant. Nothing is "over" until they manage to withdraw all that extra liquidity.

Which is the tricky part.

Exactly! It's happened in the past. Inflation starts to creep up, but the economy is still lagging. The Fed is then stuck between reining in inflation and potentially stunting future growth. Pull back too late and you end up with the Carter years: mediocre growth and an inflation in the teens.

The $xxxxB sat in banks as excess reserves that the Fed paid interest on. None of it hit the real economy.

This is my favorite part. This is how most keynesians react when confronted with the harsh realities of QE. This and "the consumers just aren't spending enough." Ofc it's never enough QE and never enough spending. Meanwhile that creaking sound....

Most Keynesians I've seen seem to think QE is a fairly weak tool, from a "complete control of policy" perspective, but that it remains, in certain circumstances, marginally better than the central bank doing nothing while the government also fails to execute fiscal stimulus when it is needed.

I'm a Market Monetarist, not a Keynesian.

"Over"... i see no fat lady on stage

You see the Fed no longer pumping QE at $80B/month.

For now... QE 4 is coming, there is no doubt. It's the only tool in the chest. This time around though it won't be parked directly in the banks, but more likely it will be helicoptered directly to consumers, probably in the form of tax breaks, directly or indirectly. QE 4 will happen, but it still won't work of course because the economy sucks and people won't spend it, it will find its way back into the banks after all.

> QE 4 is coming, there is no doubt. It's the only tool in the chest.

Only if -- as you apparently do -- you redefine "QE" so broadly as to include not only every tool in the chest, but tools in completely different chests, as well.

> This time around though it won't be parked directly in the banks, but more likely it will be helicoptered directly to consumers, probably in the form of tax breaks, directly or indirectly.

QE is a kind of monetary policy, tax breaks are fiscal policy (and QE is specifically monetary stimulus by central bank purchase of financial assets from financial institutions.) These differ in kind (not degree) and authority -- the Federal Reserve can do monetary policy like QE, but not tax breaks; only Congress can do fiscal stimulus.

> For now... QE 4 is coming, there is no doubt.

Actually, I doubt that.

But if you're going to classify even tax breaks as QE4, then, sure, sooner or later there's going to be some tax breaks to somebody for something. Big enough to really classify as QE4? I doubt it.