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Bernanke: Fed may buy Longer-Term Treasuries
Calculated Risk —
From Bloomberg: Bernanke Says Fed May Buy Treasuries to Aid Economy “Although further reductions from the current federal funds rate target of 1 percent are certainly feasible, at this point the scope for using conventional interest-rate policies to support the economy is obviously limited,” Bernanke said in prepared remarks to the Austin Chamber of Commerce. One option is for the Fed to buy “longer-term Treasury or agency securities on the open market in substantial quantities,” Bernanke said. “This approach might influence the yields on these securities, thus helping to spur aggregate demand.” Here is Bernanke's ...
Fed's Bernanke: Fed may buy Treasuries, agency bonds to stimulate economy
BloggingStocks —
... "Although conventional interest rate policy is constrained by the fact that nominal interest rates cannot fall below zero, the second arrow in the Federal Reserve's quiver -- the provision of liquidity -- remains effective," Bernanke said in a speech Monday in Texas. "The Fed could purchase longer-term Treasury or agency securities on the open market in substantial quantities. This approach might influence the yields on these securities, thus helping to spur aggregate demand." ...
Bernanke: Federal Reserve Policies in the Financial Crisis
Economist's View —
Ben Bernanke does not expect further interest cuts to have much of an impact on the economy,
so they will have to rely upon other policy tools
Federal Reserve Policies in the Financial Crisis, by Ben Bernanke, Federal
Reserve: ...[O]ur nation ... is being tested by economic and financial
challenges. Those challenges and the Federal Reserve's policy responses are the
topic of my remarks today.
Federal Reserve Policies during the Crisis
As you know, this extraordinary period of financial turbulence is now well into
its second year. ...
The Federal Reserve's strategy for dealing with the ...
More Stupidity In The Markets
The Market Ticker —
Unbelievable stuff.... Let's start with the Treasury Complex. Anyone want to argue about "borrow short, lend long, make a big fat positive yield curve to help banks" any more? No? Gee, why not, with the TNX now trading down at 2.7%?! That's a depression print guys, and Bernanke spiked the hell out ...
They don’t call him “Helicopter Ben” for nothing
self-evident —
Bernanke gave a speech today.
Although conventional interest rate policy is constrained by the fact that nominal interest rates cannot fall below zero, the second arrow in the Federal Reserve’s quiver–the provision of liquidity–remains effective. Indeed, there are several means by which the Fed could influence financial conditions through the use of its balance sheet, beyond expanding our lending to financial institutions. First, the Fed could purchase longer-term Treasury or agency securities on the open market in substantial quantities. This approach might influence the yields on these securities, thus ...
Helicopter Ben Pulls Out Bazooka
Mish's Global Economic Trend Analysis —
Treasuries staged yet another massive rally today as Helicopter Ben imitates Paulson and pulls out his own bazooka. Inquiring minds are noting that Treasury Yields Drop to Record Lows as Bernanke Cites Buybacks. Treasuries rose, pushing yields to record lows, as Federal Reserve Chairman Ben S. Bernanke said the central bank may purchase Treasuries and target long-term interest rates to combat the deepening recession. Bonds rallied for a fourth day, sending yields on two-, 10- and 30-year debt to the lowest since the Treasury began regular sales of the securities. Bernanke said he has “obviously limited” room to lower interest ...
Fed and tresury officials on why they did what they did
FinanceProfessor.com —
I am a "glass is half full" person who on top of that thinks that we will probably find more water before even that is gone. But I do get a tad concerned when smart people who have informational advanatges get worried. We had two examples of this today. ...
Fed Watch: A Step Towards Explicit Quantitative Easing
Economist's View —
Tim Duy thinks about where the fed is headed next:
A Step Towards Explicit Quantitative Easing, by Tim Duy: Dull times
these are not – Monday was another whirlwind that culminated with another steep
drop in equity markets, despite clear indications that Bernanke & Co. are ready
for a broader campaign of quantitative easing.
The day brought more recession news, of the official variety as the NBER
declared the recession began in December 2007. My own estimation was closer to
the middle of this year, consistent with the research of our
colleague Jeremy Piger, but differing with the NBER is ...
Collapsing yields, a twisting Fed
FT Alphaville —
Changes over the past few days alone: US yield curve flattening (Bloomberg chart) The US yield-curve continues its dramatic flattening. All of which is quite in line with the quantitative easing policy - designed to bolster the economy by flooding the banking system with money - that dare not speak its name at the Fed. As well as - or perhaps better put because of - such easing, Bernanke is twisting. In 1961, the Fed launched the first - formally, only - “Operation Twist”. The idea then was that the Fed would use its powers in open market operations to target asset prices: specifically, to flatten the yield curve. The Fed operated directly in the long term ...
Fed Bonds
Alea —
No panic, this is probably a scheme to address some of the problems caused by paying interest on excess reserves but as, B.B. has said recently, the Fed is not legally able to pay certain big providers like the GSEs. Better than letting the Fed issue bonds, change the law and let them pay interest to all fed funds suppliers.
B.B on excess reserves:
In principle, our ability to pay interest on excess reserves at a rate equal to the funds rate target, as we have been doing, should keep the actual rate near the target, because banks should have no incentive to lend overnight funds at a rate ...
Insolvency vs. Liquidity, or Austrians vs. Keynesians
GoldSeek.com —
-- Posted Monday, 6 April 2009 | Digg This Article Digg It! | Source: GoldSeek.com An economics debate of very great importance is surfacing. Is the governments economic rationale for bailing out the banks valid? If it is not, then the entire case for the bank bailouts fails. On one side of the debate are Austrians using Austrian economics, on the other side are Keynesians using Keynesian economics. Gary North writes "The government, which is running a trillion-dollar deficit this fiscal year, is adding ever more debt to save the favored banks. It is buying the banks' insolvency in the name of future taxpayers." North sees the bank ...
