The following brief paragraph from David Rosenberg should explain why any additional easing out of Bernanke at this point will be purely politically motivated, just as Rick Santelli explained yesterday. Furthermore, it demonstrates that, as has been patently obvious for years, the Fed is not only not an impartial institution but is actively in the business of perpetuating a broken political model (as a reminder, the Fiscal Cliff issue would be resolved yesterday if endless promises of more QE did not have the S&P at 2012 highs, but instead in the triple digits, as every Congressmen would have no choice but to immediately cut a comrpomise with their 201(k) plunging, and phones burning off the hook, and angry voters waiting to explain how they feel), which leaves the Fed will engaging in not only failed monetary policy but being a fiscal policy proxy as well (because lest we also forget, the 10 year near record lows is not exactly permissive to a prudent long-term debt issuance strategy).
It is rather amazing that a 2.8% yield on the long bond couldn't do the trick. By hook or by nook, it looks like the Fed is going to make an attempt to drive the rate down even further — but if that was the answer, wouldn't Switzerland, Japan and Germany be in major economic booms right now seeing as how low their 30-year bond yields are? Monetary policy in the U.S.A. is not the problem, so it is doubtful that it will be the solution. It all boils down to fiscal and regulatory policy and how the government can part the clouds of uncertainty — the Fed may be able at the margin to cushion the blow, but that's about it.
That is about it indeed. And will continue until the Fed finally does engage in more QE, the market rips then tumbles, and everyone finally has no choice but to acknowledge Bernanke's new clothes were never there to begin with.