Yesterday the Fed indicated that they would keep their rate stable. No news there as they said since the beginning of the crisis that they would keep their rates low for an “extended period”. But what is interesting (but not surprising) is their indication that, fearing deflation like the plague, they are prepared to provide additional support to the economy via large-scale purchases of Treasuries (QE). They had already done it on a smaller scale last month using their proceeds from mortgage backed securities to buy Treasuries.
I know it’s not customary to find people like central bankers very funny but …Read More