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a
uh...
highly
a lot of people are hailing this as a big big-deal and i think it's a
moderately sized deal
the federal reserve will take steps to bolster the economy if you believe
they have the power to do this and
this is uh... this is of some controversy
both on the left in the right depending on uh... which khana miss you talk to
nevertheless
the fed and
care has and now too
that at the very least they're accepting explicitly their dual mandate
which is to provide
price controls
deal with unemployment
so the fed will continue
or at the very least has set new benchmarks
which is they will continue to he's in hold up uh... he's
monetary policy
and hold down interest rates
until the unemployment rate falls to six point five percent or
inflation
looks like it's likely to exceed two point five percent up to this point the
only thing the fed has at least publicly said that they're interested in is
maintaining a two-percent inflation rate
he said it would by forty five billion dollars in treasury bonds a month on top
of the forty billion amount that's already buying in mortgage bonds
the theory is this will flood the market with money
reduced interest rates on a wide range of of different link the deferring loans
and this will sit supposedly simulate borrowing
i am a little skeptical
that giving more money to the banks who seem to be sitting on a lot of cash
anyways is gonna make a difference in terms of
stimulating
borrowing
however it is at least a positive sign that the fed is recognizing
that
they should send a signal
rates will not go up until we have hit a certain benchmark in terms of
unemployment
and or a higher threshold for inflation
fat expects unemployment rate at the end of next year to be between seven point
three percent
and seven point seven percent
there is uh... people with their arm
commissar there's a wall
what we really should be doing is aiming for three or four percent inflation rate
and we shouldn't be using unemployment brought rather employment
as a measure in which uh... for the fed to change its uh...
disposition
but be that as of may
most people are perceiving this as a positive step even if you believe that
there are more efficient ways
for the fed to do this then just enriching bankers
but uh... who knows maybe they'll just to stop and uh... laundering drug money
now
i doubt it
the official announcement that was uh... involved at this statement to support
continued progress toward maximum employment and price stability
the committee expects a highly accommodative stance of monetary policy
will remain appropriate for a considerable amount of time after the
asset purchase program ends an economic recovery strengthens
in other words uh...
we're gonna keep buying up bonds
and we're going to recognize that we have this dual mandate
and we're gonna maintained at this disposition until we get to a certain
threshold from for employment
so uh...
supposedly what also happened is
with a higher inflation rate and rate target of two point five percent
you've got uh... certainly investment vehicles
will look a little bit less attractive
and investors will go out and pursue a slightly more risky
strategy to raise their rates of return
i don't know what's gonna happen
but that's uh... that maybe will have somebody on uh... down the road
to talk about that incredibly dry
but apparently very relevant uh...
new policy