The Fed Looks Poised for Timidity
In the minutes from the Federal Reserve's December meeting, the market keyed on one phrase -- that "several" members of the Federal Open Market Committee thought quantitative easing might have to be curtailed well before year-end. However, a new research note from Morgan Stanley's David Greenlaw suggests we should look elsewhere in that same report for the reason why. In the very beginning of the minutes, under the heading "Options for Continuation of Asset Purchases," we see the following discussion:
"In their discussion of the staff presentation, some participants asked about the possible consequences of the alternative purchase programs for the expected path of Federal Reserve remittances to the Treasury Department, and a few indicated the need for additional consideration of the implications of such purchases for the eventual normalization of the stance of monetary policy and the size and composition of the Federal Reserve's balance sheet."...905 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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