True to form, Paul Krugman doesn't mince his words when describing the Federal Reserve's reaction to the sluggish economy these days, calling it "cowardice." On Wednesday, the Fed left its key interest rate unchanged and said in no uncertain terms that another round of economic stimulus - in the form of quantitative easing - wasn't in the cards now that the deflationary threat has subsided and employment is improving, albeit at a very slow pace.
The Fed also lowered its economic growth projections for 2011 and 2012, and revealed a chart showing its employment projections until the end of 2013 - with only modest improvements shown.
"And in response to this dire prospect, it declares its work is done," said Mr. Krugman, the New York Times blogger and columnist (and Princeton University professor).
"I'm aware that there are doubts about how much the Fed could accomplish; I share those doubts. But that's no reason not to try. This display of passivity is awesome. And it's shameful."