Not everyone is thrilled with the Federal Reserve's loose purse strings over the past few years. With the economy now on the mend, many had hoped the massive spending sprees would finally start to wind down.
But that might not be the case. At least not yet.
Back at its September meeting, the Fed's policy making committee announced plans to launch QE3 -- a massive bond-buying program with an indefinite conclusion. As Chairman Ben Bernanke explained at his post-mortem press conference, the bond purchases – to the tune of $40 billion a month – would end only when the Fed decides the labor market had substantially improved.
What we didn't know at the time was just how the Fed would measure that improvement. Would there be an unemployment rate target? A rebound in payrolls?
Wednesday afternoon, we got a bit more clarity on the subject, when the Fed released minutes from its meeting in October. It seems Fed members are leaning toward giving people more details about how they plan to evaluate the health of the job market:
"[A] couple of participants noted the likely usefulness of clarifying the range of indicators that would be evaluated in assessing the outlook for the labor market."
So hopefully we'll hear more details on that soon.
But the minutes also signaled more bond buying to come next year. Even with QE3 left open ended, an earlier program involving bond swaps – a.k.a Operation Twist -- is scheduled to run out at the end of the year.
"Looking ahead, a number of participants indicated that additional asset purchases would likely be appropriate next year after the conclusion of the maturity extension program in order to achieve a substantial improvement in the labor market."
So it seems like at least some Fed members still have their sights set on more bond shopping once Operation Twist expires.
A weak August jobs report signaled hiring continues to slog along at a snail's pace, giving the Federal Reserve even more reason to enact more stimulative measures -- possibly as soon as next week.
The economy added just 96,000 jobs in August. And even though the unemployment rate dipped to 8.1% from 8.3% in July, any number above 8% is still uncomfortably high for the Fed. (Inflation, on the other hand, is MOREAnnalyn Kurtz - Sep 7, 2012 10:21 AM ET
The Federal Reserve's next policy meeting is a two-day session concluding on June 20. That's just ten days before the Fed's Operation Twist policy -- swapping short-term bonds for ones with longer duration to help keep 10-year and 30-year bond yields low -- expires. Up until recently, few expected the Fed would seriously consider extending Twist.
But what a difference a lousy job report makes. Atlanta Fed president Dennis Lockhart, who MOREPaul R. La Monica - Jun 6, 2012 10:18 AM ET
Most Federal Reserve speeches are a chore to make it through. And then there's Dallas Federal Reserve president Richard Fisher. I've had a man crush on Fisher for a while because his remarks are often peppered with a refreshing dose of non-wonky references to things like tequila, Washington Irving and Bob Dylan.
I also appreciate the fact that Fisher is a bit of a contrarian. He is an unabashed inflation hawk MOREPaul R. La Monica - Mar 5, 2012 2:21 PM ET
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