Federal Reserve To GOP: Take A Hike!

[Swede]

In a new iteration of Quantitative Easing -- that Fed watchers are calling "Operation Twist" -- the Federal Reserve will swap $400 billion worth of medium term bonds for longer term bonds over the next nine months,to drive down long-term interest rates to encourage immediate investment. Separately, it will take steps to drive down mortgage interest rates.

It's the first significant action the Fed has taken to juice the economy since a modest second round of monetary stimulus ended several months ago. However, the Fed says it continues to expect unemployment to drop slowly and for inflation to remain below the target rate -- meaning it isn't attempting to spur immediate spending and investment by raising the expectation that prices will soon rise. Though the hope is that the new easing will accomplish that on its own.

Politically, the action is sure to rankle Republicans, both in the presidential primary, where chairman Ben Bernanke has become a whipping boy, and on Capitol Hill, where leaders have more cautiously criticized Fed policy.

http://tpmdc.talkingpointsmemo.com/2011/09/federal-reserve-to-gop-take-a-hike.php?ref=fpa