The U.S. Federal Reserve is reflected in a car as a security officer patrols the front of the building in Washington, June 24, 2009. REUTERS/Jim Young
The U.S. Federal Reserve is reflected in a car as a security officer patrols the front of the building in Washington, June 24, 2009. REUTERS/Jim Young
So this is their plan to reduce the deficit. Not cut spending. Not get out of the way of the private sector. No. They are just going to devalue the dollar so that what is owed is effectively less than what was borrowed. I guess the good news is that the payback amount on my house has just been reduced . . . the bad news is that the money I’ve been putting into the bank to pay it off with has just been reduced too. Sheesh!
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The $600 billion purchase plan is slightly above the $500 billion expected by the market. See text of FOMC statement.
But the length of the program and the average purchase rate was on the low end of estimates.
“They did as little as they could get away with,” said Bill Cheney, John Hancock chief economist, who said he was looking for purchases of about $100 billion per month.
Cheney said this might reflect internal Fed politics. Many FOMC members spoke against quantitative easing in the past few weeks.
Markets gyrated in the aftermath of the move, with the Dow Jones Industrial Average /quotes/comstock/10w!i:dji/delayed (DJIA 11,198, +9.50, +0.09%) in positive territory in late afternoon trade. See Market Snapshot.
Midterm Elections Aftermath: 5 New Economic Battles for Obama and the Republicans
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The Daily Beast ^ | 11/02/2010 | Charles Gasparino
Posted on Wed 03 Nov 2010 06:39:36 AM PST by WebFocus
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3. Ending the Fed. If many of the Tea Partiers have their way, the Federal Reserve will go the way of Lehman Brothers and be abolished. While such a radical move isn’t in the cards even if the Republicans win 70 House seats and take the Senate as well, the central bank is likely to come under unprecedented scrutiny with Republicans in Congress and the Tea Partiers and their patron saint, Rep. Ron Paul, gaining power and prestige. Keep in mind that just a couple of years ago, many Americans didn’t know what the Fed was, to say nothing of its role in controlling the money supply and regulating the banking system. Most still have no clue what the Fed really does, but what they do know they don’t like: namely, the Fed’s important if not pivotal role in the 2008 bailouts of the banks and insurance giant AIG. So while Paul may not get his wish, look for Chairman Ben Bernanke to take the place of Wall Street fat cats and Goldman Sachs CEO Lloyd Blankfein on the congressional-hearing hot seat. Let’s just hope Bernanke doesn’t describe his job as “God’s work” or the Fed’s days really may be numbered.
Fed Retaliates for Republican Takeover of the House