‘The Fed’s dead, baby. The Fed’s dead...’

Janet Yellen, chairperson of the US Federal Reserve. Photographer: Andrew Harrer/Bloomberg

Paul Sommerville

The fairy-tale that is the US’s economic recovery is coming to a shuddering halt. The patient has been in an induced coma for seven years, dosed with such potions as Quantitative Easing 1, QE2, Operation Twist, QE 3 — and, of course, the infusion of a seven-year drip of zero interest rates.

This has led most commentators to conclude that progress was being made and the prognosis was good. Unfortunately, when the medicine is withdrawn, the stark reality is that the patient is still very sick.