Fed to buy up to $300B long-term Treasury bonds

AP via Yahoo News ^ | March 18, 2009 | Jeannine Aversa

[TenthAmendmentChampion]

WASHINGTON (AP) -- The Federal Reserve announced Wednesday it will spend up to $300 billion over the next six months to buy long-term government bonds, a new step aimed at lifting the country out of recession by lowering rates on mortgages and other consumer debt.

At the same time, the Fed left a key short-term bank lending rate at a record low of between zero and 0.25 percent. Economists predict the Fed will hold the rate in that zone for the rest of this year and for most -- if not all -- of next year.

Fed purchases should boost Treasury prices and drive down their rates. That would ripple through and lower rates on other kinds of debt. The last time the Fed set out to influence long-term interest rates was during the 1960s.

[TenthAmendmentChampion]

Someone called this the "snake eating its tail."

[TenthAmendmentChampion]

ping

[TenthAmendmentChampion]

[OB1kNOb]

Also called "Quantitative Easing"

Also called "Monetizing the Debt"

Also called "printing money"

Also called the beginning of the end......

[b4its2late]

At the same time, the Fed left a key short-term bank lending rate at a record low of between zero and 0.25 percent. Economists predict the Fed will hold the rate in that zone for the rest of this year and for most -- if not all -- of next year.

Unlikely. Hello Jimmy Carter!

[kc8ukw]

This had been predicted by many as a future step we would see on the way to hyperinflation. Hurray.

[IDRATHERNOT]

It’s like using your VISA to pay your Mastercard.

[theruleshavechanged]

It’s stupid ap headline. . . the real news is this:

The central bank will buy an additional $750 billion mortgage securities, bringing its total purchases of these securities to $1.25 trillion. It also will boost its purchase of Fannie and Freddie debt.

That’s an outrage! Can we talk about this instead of AIG?

[elpadre]

Where is the $300B coming from?? or should I ask??

[jsh3180]

[TenthAmendmentChampion]

It’s a traveshamockery. Of the nth degree.

But AIG and the proposal to make servicemembers pay for their own war injuries are smokescreens to keep us from realizing what was happening with the economy.

[SMARTY]

Can you say Weimar Republic?

[DuncanWaring]

It’s like using your VISA to pay your Mastercard.

Actually, it's more the equivalent of paying off your Mastercard with one of those "preapproved" facsimile credit cards you get in the mail.

[brydic1]

Out of the collective imagination of Bernarke and his stooges.

[DuncanWaring]

Thin air.

[TenthAmendmentChampion]

Funny image!

[TenthAmendmentChampion]

Didn’t the Treasury bailout the Fed not long ago?

And what is the Fed if not the banks united together?

I bail you out and then you bail me out. Who’s on first?

[Hacklehead]

“It’s like using your VISA to pay your Mastercard.”

Don’t give them any ideas.

[TenthAmendmentChampion]

More:

http://www.marketwatch.com/news/story/Fed-acts-boldly-wont-distracted/story.aspx?guid={00C8F974-4000-4197-A043-6E1D035B1015}

Fed not distracted by circus over bonuses
Commentary: FOMC ramps up credit easing in face of worsening economy

By MarketWatch
Last update: 2:48 p.m. EDT March 18, 2009Comments: 181

WASHINGTON (MarketWatch) — The grownups in Washington aren’t about to let the latest political and media circus over ill-gotten bonuses distract them from saving this economy.

The Federal Open Market Committee acted very boldly Wednesday, promising to crank up the money supply until the economy starts breathing on its own again.

The FOMC said it would buy up to $300 billion in longer-term Treasurys over the next six months. And it said it would boost its purchases of mortgage-backed securities and agency debt, all in a bid to get credit flowing through the economy again. See full story.

All told, the FOMC committed to boost its arsenal by $1.15 trillion, doubling in one pen stroke the amount of “credit easing” it’s already accomplished.

[silverleaf]

lender here quoting 4.75% 30 yr fixed mortgages

unbelievable