Posted on 03/25/2011 12:17:00 PM PDT by NormsRevenge
NEW YORK, March 25 – With the economy on firmer footing the Federal Reserve Bank is unlikely to extend its bond-buying stimulus program beyond a planned $600 billion, several top Fed officials said on Friday.
Members of the more hawkish wing of the Fed went further, with Philadelphia Fed Bank President Charles Plosser saying the U.S. central bank will have to reverse its easy money policy in the "not-too-distant future" to avoid sowing the seeds of inflation.
The Fed has kept short-term rates near zero since December 2008 and has bought more than $2 trillion in long-term securities to push borrowing costs down further and boost recovery from the 2007-2009 recession.
At its most recent policy-setting meeting, policymakers voted to continue the bond-buying program begun last November and slated to end in June.
"Following through on that to the tune of $600 billion, like we've said, I think is appropriate," Chicago Fed President Evans told reporters at the regional bank's headquarters. "I personally don't see as many needs for a further amount, as I probably thought last fall."
Evans comments, along with those of Atlanta Fed President Dennis Lockhart who said on Friday that "it's a high bar" for the Fed to do more, suggest the debate at the Fed has moved away from a consideration of further easing.
"Given the pressure, from the hawks on the Federal Open Market Committee, the public, Congress, and foreign officials, I would highly doubt Evans would say something like that if Chairman Ben Bernanke, New York Fed President William Dudley, and Fed Vice Chair Janet Yellen didn't agree with him," said Eric Stein, a fund manager ..
Minneapolis Fed President Narayana Kocherlakota told reporters in Marseilles that the U.S. economy would need to worsen "materially" for the bank to consider further bond-buying.
(Excerpt) Read more at news.yahoo.com ...
saw a piece a few days back that QE3 is on deck, they just need to make the call and roll the presses.
I thought QE2 was going to be converted into a hotel.
They’re playing good guy/bad guy with contradictory announcements, made to keep everyone off balance.
Means interest rates will have to go up, possibly very high.
IMO, if they go one dollar further, the market for US Treasuries will tank and people will run from the dollar likes horses run from a burning stable - which they may still do anyway.
lol.. I hope I live long enough to sail on the QE4.
Yup,, not sure how much longer they can prop the market up.. time to audit the Fed?
We could use some good soap opera hearings in DC right up to the election next year.. and then ‘Blame Canada’ if Libya goes bad. ;-)
I think QEII will probably be enough to push this train off the tracks anyway. We are all so screwed. Wait til the end of the year and unemployment is still at 9% and inflation is still going up up and away.
Back in the day, there wee 9% Treasuries.
Perhaps there will be some relief for savers.
“lol.. I hope I live long enough to sail on the QE4”
There is another new Cunard ship known as the Queen Elizabeth: no numeral. I understood that the QE2 destined to become a moored hotel in Dubai, was to be sent to South Africa to serve as a floating hotel for last year’s world cup games.
wee=were
Outside of the monetary effects you have to ask who will finance US debt if the federal reserve stops? Japan? There still is alot of money out there but you can see the government is spending like crazy.
maybe the thought of the Ron Paul Hearings was just more than they could stomach...
. . . maybe they ran out of paper...
This is false on so many levels. First, they imply that QE is a stimulus program. It is not. Second, they imply that a stronger economy removes the need for it. This is not so. The purpose of QE is to provide funding for government deficit spending while keeping interest rates low. The problem here is that deficit spending continues, and at current interest rates being offered by the Treasury, there is no way possible to sell enough bonds to finance $1 trillion in debt each year. It simply is not possible.
There are three possibilities here:
I bet they choose option 3.
$1 trillion ain’t what it used to be. Better bank on $10 trillion.
Without QE2 there is only one place the Fed can get the money from.
Your Pension.
They may force all pension accounts to buy their garbage treasuries.
Discombobulated.......by design.
If a tree falls in the forest and the liberal media refuses to report it, does it make any noise?
It won't be reported, so it won't exist. Nothing to worry about.
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