BREAKING: No One Gives a Rat's Ass About the FOMC Statement
*yawn* The FOMC statement came out this afternoon and guess what? Sit down, folks, this might be too much to handle.
To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy. In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.Well paint me shocked, you mean they're going to keep the free money fountain flowing indefinitely?! I NEVER SAW THAT COMING OMG!
The Committee also decided to continue through the end of the year its program to extend the average maturity of its holdings of securities. Specifically, the Committee intends to purchase Treasury securities with remaining maturities of 6 years to 30 years at the current pace and to sell or redeem an equal amount of Treasury securities with remaining maturities of approximately 3 years or less. This continuation of the maturity extension program should put downward pressure on longer-term interest rates and help to make broader financial conditions more accommodative. The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities. The Committee is prepared to take further action as appropriate to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability.
It's pretty clear at this point - if it wasn't before - that there is no way out and even the Fed knows it. Eventually, they're going to have no choice but to admit it beyond the masked implications hinted to in FOMC statements. No hiding this one, folks, it's obvious to everyone.
The sad part is that they still have some wiggle room until inflation catches up with them - how it hasn't already is beyond me - so will continue to push this idea that even MORE cheap money will solve the "problem" despite cheap money BEING the problem.
When does it end? Your guess is as good as mine. A senator told me last month that we have until maybe September at this rate, and that's not even taking the Fed's nonsense into account. If you've been considering a new car or a new house, now might be the time, might as well get a piece while there are pieces still to be had.