One reason for Mr Williams concerns can be seen in the following chart in the FT sourced from the Fed itself:
This neatly sums up the reasons why what we're experiencing is a credit crises and not a conventional recession. I would hazard a guess that this is similar to Japan post the bursting of the bubble back in the early 90's. What we learned from 20 years of Japanese misery is that loose monetary conditions alone do not in fact lead to a recovery in credit markets. In fact this type of policy leads to continual distrust within a credit system as in order to efficiently disperse available capital to enterprises likely to use it wisely requires a certain faith in the system. By pushing down rates to (in the case of Japan) zero or lower actually sends the wrong signal especially if depositors (the public or cash rich corporates) see no quick change in the uptake of this cheap capital. In fact the message becomes one of - "wow, if rates are negative how come the smart people in the economy don't use it? In that case I'm/we're worried and therefore don't trust the system ourselves." The Fed now is effectively pushing on a string, just as the Bank of Japan has for many years. Credit is not getting through to SME's and therefore those free enterprise economies are unable to stimulate enough growth to increase employment. I hate to say it, but perhaps the governments should tighten monetary policy while simultaneously loosening credit conditions by either nationalisation of the banking system or the creation of new credit dispersing bodies (e.g. Fannie Mae and Freddy Mac) with clean balance sheets able to lend at reasonable terms without the anchor of bad loans and mental destruction from the 2007/8 crisis.
The earnings season as I said earlier has been a positive for the stock market, but Apple reports today and given it's status as bellwether and safe haven it will be crucial in deciding the next technical move in markets. Apple’s earnings for the quarter are seen at $10.38 a share, based on Thomson Reuters I/B/E/S. That compares with a profit of $7.79 a share for the year-ago quarter. Apple’s shares are up 49.2% for the year so far. I doubt they'll announce any further enhancements to their balance sheet via dividends or buybacks, but be aware there is potential for both.