Fed links interest rates to 6.5 pct. unemployment

[enoch150]

They may be raising rates sooner than expected.

The Fed said it can pursue the aggressive stimulus programs because inflation remains below its target of roughly 2 percent annually over the long run. The statement said officials think the Fed can keep its benchmark short-term rate near zero as long as its one- to two-year inflation outlook doesn't exceed 2.5 percent.

[cocrehamster]

They may be raising rates sooner than expected.

That statement refers to the feds "one to two year outlook" though, so it really doesn't commit them to anything as we could see inflation pick up and the fed still project low rates in their loosely defined time frame.

[ninepointfive]

Let's see. $45 billion a month on US Treasuries plus $40 billion more on mortgage backed securities or $90 billion a month or $1.08 trillion a year for at least the next three years would add $3.2 trillion to their current $2.9 trillion total assets comes to over $6 trillion or roughly 40% of GDP.

update: 80 BILLION PER MONTH

[devil21]

Hey, that's convenient. $80B (I thought it was $85B now but whatever) per month is nearly the exact amount of the yearly deficit. So can we now say the Fed is literally financing the US gov't annual deficit?

[Seraphim]

Yes that is exactly it. The Fed is monetizing close to 100% of Obama's deficit.

Hey, that's convenient. $80B (I thought it was $85B now but whatever) per month is nearly the exact amount of the yearly deficit. So can we now say the Fed is literally financing the US gov't annual deficit?

[oyarde]

I see no real reason why the paper dollar cannot be declared dead now , and just date the death certificate later when you have an exact date.