NEW YORK ( TheStreet) -- The Federal Reserve has kept the federal funds rate at zero to 0.25% since mid-December 2008, and they bloated their balance sheet. This monetary policy has failed to give traction to an economy experiencing "moderate" growth.Federal Reserve policy has allowed Wall Street to speculate in the U.S. capital markets, while the lack of Fed programs to help the housing and mortgage markets has the economy on Main Street in limbo. If the housing sector is not helped, the economy is ripe for further disappointments. U.S. Treasury yields remain near record lows on the "flight to quality" component, and there's help from the extension of "operation twist" until year-end. The FOMC has instructed the Open Market Trading Desk to implement about $267 billion in a securities twist again. In addition, the FOMC will continue to reinvest principal payments of maturing agency debt and agency mortgage-backed securities into newer agency mortgage-backed securities. The program to re-invest maturing Treasury holdings into new issues at auction has been suspended. This means that Wall Street will have more new supply to underwrite! This could cause an unintended rise in longer-term yields. Comex Gold held the $1,525 the Troy ounce base of the popped bubble as I predicted, but getting back above its 200-day simple moving average at $1,672 has been a problem. My guess is that being long gold is a crowded trade in an environment of economic uncertainties. A weekly close below my annual pivot at $1,575.80 provides a downside warning. The risk below $1,525 is to my annual value level at $1,388.40 by year end. Nymex Crude Oil appears vulnerable for at least a test of its Oct. 4, 2011 low at $74.95 a barrel given a weekly close below my semiannual pivot at $79.83. Weakness in energy prices is a clear sign of global economic weakness. With crude this low, how can the major equity averages hold the solid gains achieved since their Oct. 4, 2011 lows? Sure Fed policy has provided the liquidity for speculation in the stock market, but now major corporations are beginning to fall like a rock after lowering guidance. The upcoming earnings reports for the second quarter could be problematic given a weak Europe, a slower China, and weaker economic projections at home from the Federal Reserve. A QE3 may not work in this environment.