What Happens After QE2 Ends?

The Fed’s highly controversial QE2 program is scheduled to end in June.

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Soaring food prices have become a concern in emerging markets like China, India, and Brazil. Critics place some of the blame for higher food prices on the Fed's program, and they're worried that the end of QE2 may not be enough to stem rising inflation abroad. If the Fed decides to end its easing programs, one thing will remain the same: The Fed funds rate is still set at virtually zero, where it's been since December 2008. "[Fed] policy is still going to be easy, and that's probably not going to be helpful for the dollar, and it's probably not going to put a cap on commodity prices, unless the world economy starts having a downturn," Gelfond says. The dollar remains the world's reserve currency—meaning that many commodities throughout the world are priced in dollars—and a weak dollar has effects throughout the world, Gelfond says. He says a stronger dollar could help slow some inflationary pressures throughout the world.

Twitter: @benbaden