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The Fed should buy bonds at least until the U.S. jobless rate falls below 7.25% and should keep...

The Fed should buy bonds at least until the U.S. jobless rate falls below 7.25% and should keep interest rates near zero until the rate hits 6.5%, Boston Fed's Eric Rosengren says in pitching a plan that would set the clearest end point so far for its QE program. The Fed has said it will buy mortgage debt and possibly Treasurys until the labor outlook improves "substantially."
Comments (2)
  • Uncle Pie
    , contributor
    Comments (3206) | Send Message
     
    How does the act of driving up the price of bonds by bidding them up encourage companies to hire new staff?
    1 Nov 2012, 09:29 PM Reply Like
  • nightfly
    , contributor
    Comments (1017) | Send Message
     
    I think ur missing the point there..QE makes money cheap, loans are cheaper - the thinking goes that then investments will rise and employment along with it. The added bonus is that mortgage rates are driven down helping out morribound homeowners.

     

    The FED thinks they are the Wizard of OZ just tinkering here and there and everything will work out just dandy. Unfortunately, they ignore the imbalances their manipulations cause until too late.
    2 Nov 2012, 02:03 AM Reply Like
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