In general, more stimulus is in dire need. I'll leave it to Chris, who is away on work for a day, to let us know whether this is the correct form the stimulus could take. I could imagine some worrying that we're, yet again, artificially inflating the housing market. Then again, that concern might take second fiddle to concerns about overall economic growth.
The Federal Reserve is close to embarking on another round of monetary stimulus next week, against the backdrop of a weak economy and low inflation—and despite doubts about the wisdom and efficacy of the policy among economists and some of the Fed's own decision makers.
The Fed's aim is to drive up the prices of long-term bonds, which in turn would push down long-term interest rates. It hopes that would spur more investment and spending and liven up the recovery. But officials want to avoid the "shock and awe" style used during the crisis in favor of an approach that allows them to adjust their policy, and possibly add to their purchases, over time as the recovery unfolds.
