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FOMC Minutes Suggest Additional Accommodation Is Coming

Tuesday, October 12, 2010 - 1:53 PM
Some important excerpts of the recently released FOMC Minutes from its Sept 21st meeting:
Many participants noted that if economic growth remained too slow to make satisfactory progress toward reducing the unemployment rate or if inflation continued to come in below levels consistent with the FOMC's dual mandate, it would be appropriate to provide additional monetary policy accommodation.
Meeting participants discussed several possible approaches to providing additional accommodation but focused primarily on further purchases of longer-term Treasury securities and on possible steps to affect inflation expectations.
As a general matter, participants felt that any needed policy accommodation would be most effective if enacted within a framework that was clearly communicated to the public. The minutes of FOMC meetings were seen as an important channel for communicating participants' views about monetary policy.

This seems to suggest we may see "further purchases of longer-term Treasury securities" to drive down long-term interest rates in their next FOMC meeting (November 2-3).
Ken TuminKen Tumin5,469 posts since
Nov 29, 2009
Rep Points: 125,077
1. Tuesday, October 12, 2010 - 6:31 PM

"Forget more QE. If the FOMC does not soon allow interest rates to rise and thereby rebalance the policy equation between American savers and borrowers, then we fully expect to see gold prices climb further. Fed Chairman Ben Bernanke and the FOMC will hand the detractors of the central bank led by Rep Ron Paul (I-TX) the political issue they need to eliminate the Fed once and for all. And President Barack Obama will be wearing the concrete booties that once belonged to President Herbert Hoover.  Unlike your worthless greenbacks, you can take that to the bank." 
PurplesagePurplesage25 posts since
Oct 11, 2010
Rep Points: 73