Full Text Of Federal Reserve Rate Decision
Bernanke is out of ideas so he reverts to a warmed-over plan from the 1960s.
---
WASHINGTON (MarketWatch) — The following is the text of the Federal Reserve’s decision Wednesday to swap $400 billion of holdings into longer-term debt:
“Information received since the Federal Open Market Committee met in August indicates that economic growth remains slow. Recent indicators point to continuing weakness in overall labor market conditions, and the unemployment rate remains elevated. Household spending has been increasing at only a modest pace in recent months despite some recovery in sales of motor vehicles as supply-chain disruptions eased. Investment in nonresidential structures is still weak, and the housing sector remains depressed. However, business investment in equipment and software continues to expand. Inflation appears to have moderated since earlier in the year as prices of energy and some commodities have declined from their peaks. Longer-term inflation expectations have remained stable.
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee continues to expect some pickup in the pace of recovery over coming quarters but anticipates that the unemployment rate will decline only gradually toward levels that the Committee judges to be consistent with its dual mandate. Moreover, there are significant downside risks to the economic outlook, including strains in global financial markets. The Committee also anticipates that inflation will settle, over coming quarters, at levels at or below those consistent with the Committee’s dual mandate as the effects of past energy and other commodity price increases dissipate further. However, the Committee will continue to pay close attention to the evolution of inflation and inflation expectations.
To support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with the dual mandate, the Committee decided today to extend the average maturity of its holdings of securities. The Committee intends to purchase, by the end of June 2012, $400 billion of Treasury securities with remaining maturities of 6 years to 30 years and to sell an equal amount of Treasury securities with remaining maturities of 3 years or less. This program should put downward pressure on longer-term interest rates and help make broader financial conditions more accommodative. The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate.
To help support conditions in mortgage markets, the Committee will now reinvest principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities. In addition, the Committee will maintain its existing policy of rolling over maturing Treasury securities at auction.
The Committee also decided to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013.
The Committee discussed the range of policy tools available to promote a stronger economic recovery in a context of price stability. It will continue to assess the economic outlook in light of incoming information and is prepared to employ its tools as appropriate.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Sarah Bloom Raskin; Daniel K. Tarullo; and Janet L. Yellen. Voting against the action were Richard W. Fisher, Narayana Kocherlakota, and Charles I. Plosser, who did not support additional policy accommodation at this time.”
---
Start watching at the 3:30 mark - Relevant commentary runs 1 minute from there.
Sep 21, 2011 at 2:30 PM
Reader Comments (17)
We don't know WTF to do, so we're throwing in the towel. Peace! (Shalom!)
Dow down 128 in response.
http://www.marketwatch.com/
http://dissenter.firedoglake.com/
http://www.marketwatch.com/story/fed-getting-more-worried-about-europe-2011-09-21?link=MW_home_latest_news
Bank of America leads banks down after Moody’s cuts debt rating
http://www.marketwatch.com/story/american-express-rise-aids-financial-sector-2011-09-21-104460
Dow taking a beating down 180. ouch!
UPDATE - Dow falls 260 points.
http://www.shtfplan.com/headline-news/8-reasons-why-the-great-depression-is-the-best-case-scenario_09212011
http://www.youtube.com/watch?v=htX2usfqMEs&feature=player_embedded
You said something the other day that I don't want going down Misinterpretation Ave. Yeah, there's a lot of rap I like; it seems to conglomerate in the early 90s.
But for the record, my favorite musician of all time--hands down and forever--has been Ennio Morricone for many decades.
Unlike rappers, Ennio needed no words. A quite remarkable feat in these times.
---
Cheyenne. You mean Public Enemy?
Fight The Power
http://www.youtube.com/watch?v=2WHe5fxS3dA
Turn it up loud...
Sorry, that was just pointless verbiage. Hope you don't take umbrage.