Federal Reserve to buy longer-term bonds to try to lower interest rates, boost economy

[alp227]

Source: The Washington Post

The Federal Reserve took a dramatic step Wednesday to help revive the economy, resuming its unconventional efforts at stimulating growth nearly a year after embarking on an initiative that ultimately failed to deliver a healthy recovery.

The Fed’s latest move aims to lower interest rates on mortgages and other long-term loans without making another major infusion of money into the economy — and brushes aside a crescendo of criticism from Republicans who have been making the Fed a campaign issue.

The announcement that the Fed would buy $400 billion in long-term Treasury bonds immediately achieved its intended effect, pushing rates on these securities and other investments to their lowest level in decades.

But the stock market rendered a sharply negative verdict. The Standard & Poor’s 500-stock index tumbled almost 3 percent on the Fed’s discouraging statement that its leaders see “significant downside risks” for the economy. Asian markets also retreated in early trading Thursday. Japan’s Nikkei 225 index ended its morning session down 1.6 percent.

Read more: http://www.washingtonpost.com/business/economy/fed-to-buy-longer-term-bonds-to-try-to-lower-interest-rates/2011/09/21/gIQAqZcYlK_singlePage.html

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[earcandle]

1. I really don't like that this is up to "investors" who have not been investing in anything.

[No Elephants]

2. After we spend or borrow, they say we should not have and we are to blame for the bad economy.

After we save, they make sure interest is so low as to drive money out of savings.

So, the only thing we're supposed to do with our money is invest it in stocks, right?

And, if we're all heavily invested in stocks, maybe we'll feel much better about the next round of bail outs?

Fuck Shakespeare. The first thing we do, let's kill all the economists.