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Fin Article B2 #1
Fed Buys Bonds to Spur Economy
Question | Answer |
---|---|
Fed launches new round of bond buying, 9/13 2012 | unconventional actions to support the economic recovery |
Bernanke addressed 3 main concerns abt FR's monetary policy | Fed purchases, low returns and inflation of the economy |
Central bank's goal | moving in the right direction so we don't stagnate |
Fed policy-making committee buying $40B/mo | agency mortgage-backed securities on an open-ended basis so it can buy addt'l if the job market doesn't improve |
Operation Twist - will continue | Bank selling short-term bonds and using the proceeds to but loner-term bonds to bring down long-term rates. |
Total purchase - $85B longer term securities | also printing more money to fund its mortgage-bond purchases |
First incr in short-term rates 2015 | this lowered the quarterly growth forecasts for this year. |
Purchases are aimed at pushing down long term interest rates | especially lowering mortgages rates. They want to push up the values of assets like stocks and homes. |
Bond buying programs | intended to make borrowing cheaper to spur spending and investment, though economists are skeptical. |