More FED easing & Bond purchases

[Pauls' Revere]

More purchases of mortgage backed debt and before more easing.

\http://finance.yahoo.com/news/fed-se...050252109.html

WASHINGTON (Reuters) - The Federal Reserve is expected to announce a fresh round of bond buying on Wednesday as part of its efforts to support a fragile economic recovery threatened by political wrangling over the government's budget.

The central bank looks certain both to extend its purchases of mortgage-backed debt and replace another expiring stimulus program with a new bout of money creation.

Policymakers are also likely to repeat a pledge to keep buying bonds until the labor market outlook improves substantially. A drop in the jobless rate to 7.7 percent in November from 7.9 percent in October was driven by workers exiting the labor force, a fact certain to disappoint the Fed.

"The economic environment seems ripe for those at the Fed who support continued accommodation," said Victor Li, professor at the Villanova School of Business and a former St. Louis Fed economist.

As its last program of Treasury purchases, known as Operation Twist, draws to a close, officials look set to replace it with a fresh $45 billion per month in buying. Unlike those in Twist, which were funded by sales and redemptions of short-term debt, the new Treasury purchases will further expand the Fed's $2.8 trillion balance sheet.

[DFF]

So, if this is correct, then the Fed will be monetizing a total of $90 Billion a month in securities...or a TRILLION dollars in a year!