Atlanta Fedhead Lockhart: "More MBSs? No Thanks, We're Stuffed."
Welcome to the club, DL. Better late than never.
JDA won't hold her breath. Could you even imagine? "Um yeah, even though we've been artificially propping up markets for months, we're going to go ahead and pass on those MBSs. Thanks, though."
Bwhahahahahahahahahahaha yeah right. Someone write this down, it's almost too precious.
Atlanta Federal Reserve Bank President Dennis Lockhart said on Thursday the U.S. economic recovery has started and the Fed could stop short of buying the full amount of mortgage-related securities it said it would buy to boost the economy.
Programs to buy $200 billion of mortgage-agency debt and $1.25 trillion of mortgage-backed securities were deliberately described as able to purchase "up to" those amounts, Lockhart told reporters after speaking at the World Affairs Council of Jacksonville.
That caveat was intended to give policy-makers flexibility in ending the programs short of the full target amount should conditions warrant, he said.
"So it's not inconceivable that we'll decide to do less," Lockhart said.
The Fed has bought $836 billion in mortgage-backed securities and $122 billion in agency notes, according to the most recent information.
The Atlanta Fed president, a voter on the Fed's policy setting committee, joins Richmond Fed President Jeffrey Lacker in suggesting the central bank might curtail its purchases because the recovering economy may no longer need additional stimulus. The Fed launched the securities buying initiatives as an alternative to cutting interest rates, which it had already cut to near zero.
Lockhart said he expects the Fed to discuss how best to phase out the mortgage-related securities buying program, which ends in December, at its next meeting Sept. 22-23.
He said the U.S. economic recovery had begun but that it would likely be a period of sluggish growth.