The Federal Reserve continues to view the economic recovery as too slow for comfort, and is therefore proceeding with its controversial plan to print $600 billion and buy long-dated Treasury securities with the newly created funds, the central bank announced today. It cited several factors in this decision that are probably well known to many Americans:
Employers remain reluctant to add to payrolls. The housing sector continues to be depressed. Longer-term inflation expectations have remained stable, but measures of underlying inflation have continued to trend downward.
As such, the creation of additional money to buy Treasuries will continue at a rate of about $75 billion a month. The target interest rate will remain between 0 and 0.25 percent. All the Federal Open Market Committee members voted in favor of the policy, with the exception of super inflation hawk and perennial dissenter Thomas M. Hoenig.
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