What is QE III likely to accomplish? Probably not much.

James Hamilton explains the likely effect of QE III here. He is silent on how expanding the Fed's balance sheet further is going to complicate the exit strategy when that time comes. Once again, it is hubris for the Fed to claim that they "got it covered" when it comes time to unwind the QE programs. Buying $40 billion in MBS a month adds to that mind set.