Fed Pulls Trigger, to Buy Mortgages in Effort to Lower Rates

Published: Thursday, 13 Sep 2012 | 3:35 PM ET
CNBC.com Senior Writer

The Federal Reserve fulfilled expectations of more stimulus for the faltering economy, taking aim now at driving down mortgage rates until an improvement in unemployment that the central bank says will be a problem for several years.

Ben Bernanke
Travis J. Garner | Bloomberg | Getty Images

The Fed said it will buy $40 billion of mortgage-backed securities per month in an attempt to foster a nascent recovery in the real estate market.

The purchases will be open-ended, meaning that they will continue until the Fed is satisfied that economic conditions, primarily in unemployment, improve.

"There's strong hints that they'll do Treasurys next," Joe LaVorgna, chief economist at Deutsche Bank Advisors, said in a phone interview from London. "They're pulling out all the stops to try to get this economy to gain some traction and, most important, to get unemployment down."

The stock market, which had been slightly positive prior to the decision, shortly after 12:30 p.m., surged while bond yields, particularly farther out on the curve, jumped higher. Gold and other metals gained at least 1 percent across the board while the dollar slid against most global currencies.

Enacting the third leg of quantitative easing, or QE3, will take the Fed's money creation past the $3 trillion level since it began the process in 2008.

"The Committee is concerned that, without further policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions," the Open Market Committee said in a statement.

As a follow-up to the statement, the Fed released its latest economic projections, which foresee slow growth including a jobless rate that stays above 7 percent into 2014. The economic projections expect growth to remain slow but to improve due to the stimulate measures announced Thursday.

In addition, the Fed said it will continue its program of selling shorter-dated government debt and buying longer-term securities, a mechanism known as Operation Twist. It also will continue its policy of reinvesting principal payments from agency debt and mortgage-backed securities back into mortgages.

The Fed left its funds rate unchanged at near-zero but offered one change in that regard, saying the rate would stay at "exceptionally low levels" until at least mid-2015.

 

BENNIE'S FUNNY MONEY STORY

Views: 81

Replies to This Discussion

;)

Something is getting pumped but I'm sure it's not the economy. Ben is at the printing press, creating more fiat money to his bankster buds or should I say gangster thugs? And all the time we Americans are getting pumped alright; screwed over big time. Because you know who ends up paying for all the pumping?... We the People yet again. And we don't even get a dinner date out of the deal the bastards!

RSS

"Destroying the New World Order"

TOP CONTENT THIS WEEK

THANK YOU FOR SUPPORTING THE SITE!

mobile page

12160.info/m

12160 Administrators

 

Latest Activity

rlionhearted_3 commented on cheeki kea's photo
Thumbnail

julian assange now free

"Julian Assange isn’t in a jail cell, but I doubt he’s free."
15 hours ago
rlionhearted_3 favorited cheeki kea's photo
15 hours ago
cheeki kea favorited MAC's video
22 hours ago
cheeki kea commented on tjdavis's photo
yesterday
cheeki kea posted photos
yesterday
MAC posted videos
yesterday
cheeki kea commented on rlionhearted_3's photo
Thumbnail

Rough week.

"oh wow so glad you're ok lionhearted. Hope you and your neighbours have the building repaired…"
yesterday
Doc Vega posted blog posts
yesterday
Doc Vega posted a blog post

One More Time

If I could fall in love one more timeAnd cheat fate on the turn of a dimeBeing alone in a man’s…See More
Sunday
Doc Vega posted a blog post

While the Wounds Are Still Fresh

 In this age of lies Love has become a sad compromise The source of my emotional demiseAll the…See More
Saturday
Doc Vega's 4 blog posts were featured
Saturday
Larry Harmen's blog post was featured

China has weaponized Ebola to take over North America after WW3

The Defense Minister with his own Mouth has said it.…See More
Saturday
tjdavis's blog post was featured
Saturday
FREEDOMROX's blog post was featured
Saturday
Less Prone favorited Doc Vega's blog post Countdown to WWIII ? You be the Judge as the Media Hides the Developments of the Democrats
Saturday
Doc Vega posted a photo
Friday
Doc Vega posted a blog post

My Twisted Destiny

My Twisted Destiny Darling why don't you come and play with meOn a planetary seaOn a frozen moon we…See More
Friday
tjdavis posted a photo
Friday
tjdavis posted a video

David⚡️Bowie - Ricochet documentary (1984)

In December 1983, David Bowie's massive 'Serious Moonlight ' tour arrived in Asia for three shows in Hong Kong, Bangkok and Singapore, virtually uncharted te...
Friday
rlionhearted_3 posted a status
"12 units gone, 6 units heavily damaged, 6 units saved, including mine, been a stressful 10 days!"
Thursday

© 2024   Created by truth.   Powered by

Badges  |  Report an Issue  |  Terms of Service

content and site copyright 12160.info 2007-2019 - all rights reserved. unless otherwise noted