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Wednesday, December 12, 2012

Federal Reserve announces further bond buying

All is good, right?

This statement pretty much sums up the Fed's decision to initiate more bond buying

The goal is to keep long-term interest rates down and encourage individuals and firms to borrow and spend more. 

...so said the drunken sailor.  I'm reluctant to describe the Fed's decision as the actions of drunken sailors because it likely tarnishes their reputation as free spenders.  They at least sober up eventually.


Headline: Federal Reserve announces further bond buying

The US Federal Reserve has announced a fresh round of bond buying to try to boost the US economy.

Its "Operation Twist" programme, in which the central bank buys longer term bonds and swaps them for shorter term bonds, expires at the end of the year.

The central bank has now said it will buy $45bn (£28bn) a month in longer term government bonds.

The goal is to keep long-term interest rates down and encourage individuals and firms to borrow and spend more.

While the monthly $45bn purchases in Twist were funded by sales and redemptions of short-term debt, the new purchases will expand the Fed's $2.8 trillion balance sheet.

Source: more


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