The Federal Reserve launched another aggressive stimulus program on Thursday, saying it will buy $40 billion of mortgage debt per month and continue to purchase assets until the outlook for jobs improves substantially.
In a significant shift in the direction of U.S. monetary policy, the Fed has tied its unconventional bond buying directly to economic conditions, a move that is likely to be controversial among central bank critics.
“If the outlook for the labor market does not improve substantially, the committee will continue its purchase of agency mortgage-backed securities, undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved in a context of price stability,” the Fed said in a statement.
In an additional step that reflects just how concerned Fed officials have become about the health of the economy, policymakers said they would not likely raise rates from current rock-bottom lows until at least mid-2015. Previously, it had set such guidance at late 2014.
Not only is it QE3, but it’s got no set expiration date, apparently. You know, exactly the kind of sustained growth program that everyone’s been screaming for now for a couple of years. That sound you hear is Austrian-school economists exploding like microwaved giant jawbreakers, not to mention the sound of Mitt Romney’s campaign guys going “Umm…we argued that something had to be done, but we refused to provide specifics…now what?”
I gotta fiver says House Republicans will try to impeach somebody before the week’s out.
Congressional Republicans, wary of the Fed’s recent efforts to stimulate the recovery, said Wednesday that the its political independence could be jeopardized if officials embark on another round of stimulus so close to Election Day.
“It really is interesting that it is happening right now before an election,” said Rep. Raul Labrador (R-Idaho). “It is going to sow some growth in the economy, and the Obama administration is going to claim credit.”
“I am shocked, just shocked, that politics are going on in this city!” Rep. Tom McClintock (R-Calif.) said sarcastically.
Yeah, let's think about that. For helping the economy and following its dual mandate of lowering inflation and lowering unemployment, the Fed must be punished. The American people are being helped economically by the federal government, a crime that probably merits Bernanke's public flogging, right?
Expect to hear more of this utter nonsense from batshit crazy Republicans in the days ahead.