The minutes from the OT FOMC meeting in Sept revealed the different options that are still available to them in their continuous attempt to help the economy. While the information from the Aug meeting “did not suggest contraction in activity…stresses in global financial markets, sluggish growth in households’ real incomes, and heightened uncertainty about economic prospects seemed to have contributed to lower consumer and business sentiment and to be weighing on economic growth.” Also, they saw continued weakness in labor markets and continued to believe that inflation will recede from here. It is this belief that triggered more action with the consensus going with OT. Two members wanted even more and three wanted nothing more. With respect to QE3 at some point in the future, “a NUMBER (my emphasis) of participants saw large scale asset purchases as potentially a more potent tool that should be retained as an option in the event that further policy action to support a stronger economic recovery was warranted.” Yep, they still believe money printing can make things better. Fed member Pianalto today in a separate speech summed up monetary policy with this, it’s “about keeping interest rates low.” Bottom line, the Fed will continue with even cheaper money to counter the consequences of the previous period of Greenspan/Bernanke cheap money.
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