Well, it took three years, but finally the Goldman Sachs-based head of the New York Fed, Bill Dudley, admitted what we all knew. From a speech just given by NY Fed's Bill Dudley [5]at the 2014 AEA meeting in Philadelphia:
"We don't understand fully how large-scale asset purchase programs work to ease financial market conditions"
Or, in other words, "we still don't know how QE works." It just does (thank you Kevin Henry [6]). And this coming from the people who want their word to become equivalent to gospel in a time when QE is being phased out and replaced with forward guidance. Luckily, at least the Fed knows all about how "forward guidance [7]" works.
The good news: it only took $4+ trillion in Fed "assets" for the central bank to understand it had no idea what it was doing.
[8]
In retrospect, things could always have been worse.