Stimulus? Many Say, “No Thanks”

28 06 2011

Over the last eight months the Federal Reserve has pumped $600 billion into the economy. The question being asked right now is: Should the Federal Reserve continue its efforts to stimulate the economy?

Many expect stocks to actually rise throughout the summer, up by at least 7%. If that is the case, then the S&P 500 (an index of 500 large cap stocks traded in the United States) would end 2011 with gains in the double-digits, which would be a 3 year high.

For this reason, many believe the Fed should not add any more to the stimulus package. One big drawback would be that further stimulus would increase the long term risk of inflation. In addition to that, this last round of the stimulus actually caused for a weaker dollar and higher food and energy prices.

What are your thoughts on having yet another round of stimulus dollars?

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