Wednesday, January 30, 2013

Realtime opened critical economic policy, "the Fed" cause hurt U.S. economic downturn.

Realtime opened critical economic policy, "the Fed" cause hurt U.S. economic downturn.

University professor Stan Ford "John Taylor" criticism of the Federal Reserve (Fed) to ignore the fact that the Fed's monetary policy is to prevent it, the economy of the country.

Taylor said the Fed has been buying mortgage-backed securities that are guaranteed (MBS) and U.S. government bonds rose. While the short-term interest rates to near 0% until the unemployment rate will improve.

"These above. Will cause a great deal of uncertainty. It is known that When the economy started to improve, the Fed would change course. Turned to the sale of assets purchased. To prevent inflation, "Taylor, a former minister Beach. U.S. Treasury said.
And added that. If sales are too slow. Federal funds used in the purchase of assets in the first period to enter.

Banking system and economy. But if the sale occurs too quickly or abruptly. It will hurt bond prices down and interest rates up too much boost. This will cause a recession in the end.
Since the financial crisis began. Fed to the third round of quantitative easing, known as E Q 1, Q 2 and Q e 2 e 3 measures first round finishes. The Fed has bought government bonds and MBA and more than $ 2 trillion. Backing up to the balance sheet to around $ 2.9 trillion. And the outbreak of the severe criticism both at home and abroad.

It is near 0% interest rate policy of the Fed today. Also cause investors to doubt. When investors. Including retirement and pension funds. Require higher returns from lower interest rates.

The comments of Professor Stan Ford was. Be held before the Fed will adopt a policy statement that will end on Wednesday, U.S. time. The analysts expect that the Fed will continue to hold interest rates at a record low. The move to stimulate the economy

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