Fed considers buying more long-term Treasury bonds to lower rates

[alp227]

Source: The Washington Post

The Federal Reserve is moving toward new steps aimed at lowering interest rates on mortgages and other kinds of long-term loans, without making another massive infusion of money into the economy.

When Fed officials hold a pivotal meeting in two weeks, they will strongly consider buying more long-term Treasury bonds, which should lead to lower interest rates for those bonds and other long-term investments. This would ultimately make it cheaper for businesses to borrow money for investments and push more dollars into the stock market, in addition to reducing rates on mortgages and other consumer loans.

To pay for the bond purchases, the Fed would sell off some of the shorter-term bonds it already owns rather than printing new money.

At their last meeting, Fed officials discussed whether to revive their earlier program of massive bond purchases, using newly printed money to buy hundreds of billions of dollars in securities as a way of pumping money into the economy. This discussion prompted wide speculation that the Fed might do it again.

Read more: http://www.washingtonpost.com/business/economy/fed-considers-buying-more-long-term-treasury-bonds-to-lower-mortgage-rates/2011/09/06/gIQAWHox7J_singlePage.html

[DJ13]

1. To lower rates?

The 10yr bond is already threatening to fall below 2%.

Theres no threat of increasing yields on the horizon, so what do they expect this to accomplish?

And if the last round of buys to lower rates is a guide, this will do nothing to lower rates where its most needed (in the consumer market).

[DCKit]

2. It's BS. Their only intent is to keep the Wall St. casino's runnning for a bit longer. nt

[truedelphi]

3. + 10,000. n/t

[defendandprotect]

5. Really enjoyed reports of how well Wall St was doing while we had IRENE raging ...!!!

About time the public figures out that Dow/Jones isn't based in any meaningful

reality which benefits the public --

[AngryAmish]

4. I heard they are considering a 50 year bond

This sounds like a good idea right now in the current low interest environment. I heard (on the radio) that the Fed is a trillion dollars to the good from QE2. That trillion would be mighty handy especially if we don't pay back the principal for fifty years. (And I will be long in the grave from cirrosis)