What is the definition of easing?

Business Week Sanjay Sanghoee says:

A sudden easing of monetary policy now would also cause over-exuberance in the stock market as the anticipation of cheaper capital fuels a buying spree, and create a bubble. Moreover, a drop in interest rates will not automatically spur lending by banks, who were hesitant to lend even in 2013 when the Fed stimulus was in full swing. This casts serious doubt on whether our economy, and consequently the job market, would actually benefit from a reversal of the Fed’s taper at all.

The stock market isn't exuberant when short term cash returns less than the inflation rate. The stock market is simply restoring short term returns to their normal level by acting as a short term reserve. As long as short term rates are maintained below inflation, the market continues to rise until consumer prices decline to restore the returns to cash.

Supposedly debtors are eased by this. 

But look, more QE by the Fed is correlated with higher interest rates on the ten year, not lower. Ten year rates jump in proportion to the rate of Fed purchases. And drop when the Fed quits. The ten year is the negative differential of the Feds bond purchases. Do I have cause and effect mixed? Is the Fed anticipating something this chart misses?


I doubt that I am missing something. Short term rates below inflation deflate consumer prices, and inflate producer prices.  Rising producer prices result in rising ten year yields.  If you believe in the secstags, this is the correct response, but that is not easing, that is forcing the secstaggers to fix the problem. If the Fed is forcing the secstaggers to fix the problem sooner than necessary, then that is tightening.

Find out who is doing the secstags, that would help.