sailingaway
06-20-2012, 06:46 PM
http://www.nytimes.com/2012/06/21/business/economy/fed-extends-program-to-lower-costs-of-borrowing.html?pagewanted=all
The central bank announced a modest expansion Wednesday of its efforts to stimulate growth, pledging to buy $267 billion in long-term Treasury securities over the next six months as part of a continuing campaign to reduce borrowing costs.
It is the first time since January that the Fed has intensified its efforts to revive economic growth, and the first time since September that it has announced a new round of asset purchases. This is the fifth such announcement since 2008.
But the new program is not large enough to provide significant economic support. Instead it amounts to a placeholder, an effort to soothe markets and preserve the status quo while the Fed seeks greater clarity about the health of the economic recovery. “We have to get further information about the state of the economy, about where things are going and about what’s happening in Europe,” Mr. Bernanke said at a news conference after the release of the policy statement and projections.
His comments raised the prospect that the Fed would act again later this year.
“We are prepared to do what is necessary,” he said, in a version of the pledge that has become his byword. “We are prepared to provide support for the economy.”
The central bank announced a modest expansion Wednesday of its efforts to stimulate growth, pledging to buy $267 billion in long-term Treasury securities over the next six months as part of a continuing campaign to reduce borrowing costs.
It is the first time since January that the Fed has intensified its efforts to revive economic growth, and the first time since September that it has announced a new round of asset purchases. This is the fifth such announcement since 2008.
But the new program is not large enough to provide significant economic support. Instead it amounts to a placeholder, an effort to soothe markets and preserve the status quo while the Fed seeks greater clarity about the health of the economic recovery. “We have to get further information about the state of the economy, about where things are going and about what’s happening in Europe,” Mr. Bernanke said at a news conference after the release of the policy statement and projections.
His comments raised the prospect that the Fed would act again later this year.
“We are prepared to do what is necessary,” he said, in a version of the pledge that has become his byword. “We are prepared to provide support for the economy.”