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Fed Cuts ‘Quantitative Easing’ By Another $10B

From the Agence France Presse:

Fed cuts US economic stimulus again

January 29, 2014

Washington (AFP) – The Federal Reserve stayed the course on tapering its stimulus for the US economy Wednesday, reducing asset purchases by $10 billion for the second month in a row.

Amid emerging-market turmoil blamed in part on its stimulus reduction, the Fed, as expected, cut the monthly bond-buying program to $65 billion beginning February and left its benchmark interest rate near zero, citing "growing underlying strength in the broader economy."

We’re beginning to wonder — with his threats ‘to go it alone’ and his letting the Fed cut Quantitative Easing — if maybe Obama isn’t throwing in the towel on winning control of Congress in the midterms, after all.

Or maybe he just wants to get all of this over with as soon as possible, so we don’t have the stock market collapsing too close to the midterm elections.

Wrapping up the final meeting of the Federal Open Market Committee under departing Chairman Ben Bernanke, policy makers noted that despite some mixed economic indicators since their December meeting, overall the US economy was doing better…

Some of the "mixed economic indicators" being: housing sales down, durable good sales down, and a "shockingly weak" December jobs report.

The Fed, whose dual mandate is maximum employment and price stability, said that conditions were appropriate for a further "measured" tapering of stimulus…

The FOMC, in an apparent reference to the shockingly weak December US jobs report, which many economists blamed on severe winter weather, said that "labor market indicators were mixed but on balance showed further improvement."

The weather in December was not particularly severe.

It pointed out that the unemployment rate fell "but remains elevated." The jobless fell to 6.7 percent in December largely due to people dropping out of the work force…

For the record, here is the full extent of the Federal Reserve’s legal mandate from the US Code, Title 12, Section 22: “The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy’s long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.”

Has the untold trillions spent on Quantitative Easing helped to promote maximum employment? No, of course it hasn’t. And, as even this article admits, the un-employment rate has only gone done because of people giving up looking for work.

In any case, either Quantitative Easing hasn’t helped at all or the Fed is shirking its duty by ending it. They can’t have it both ways.

The FOMC predicted that, with appropriate policy, "economic activity will expand at a moderate pace and the unemployment rate will gradually decline toward levels the Committee judges consistent with its dual mandate."

Translation: ‘Prosperity is just around the corner.’

It was the last FOMC meeting chaired by Bernanke, who steps down Friday after an eight-year tenure at the helm of the US central bank marked by the 2008 financial crisis and the 2007-2009 recession, the worst downturn since the 1930s depression…

And Bernanke and Obama have presided over the worst economic recovery in our nation’s history.

This article was posted by Steve Gilbert on Thursday, January 30th, 2014. Comments are currently closed.

2 Responses to “Fed Cuts ‘Quantitative Easing’ By Another $10B”

  1. I learned on Wall Street this is known as ‘Pump and Dump’ and would get your butt hauled off to face charges.

    But so long as Really Smart Government People do it, it’s okay, ‘Cause they know everything.

  2. Right of the People

    >>> Translation: ‘Prosperity is just around the corner.’

    It was the last FOMC meeting chaired by Bernanke, who steps down Friday after an eight-year tenure at the helm of the US central bank marked by the 2008 financial crisis and the 2007-2009 recession, the worst downturn since the 1930s depression…<<<

    I guess we need another world war to "jolt" us out of this depression. Of course if FDR hadn't been meddling we probably would have recovered years earlier just like the Obamanation is doing now.


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