Thursday, July 29, 2010

WHAT IS THE FED SCARED OF?

"The Fed is trying so hard not to scare the market that it risks putting the economy to sleep, a top Fed official said.

By promising to leave short-term interest rates near zero for an extended period, the Fed "may be increasing the probability of a Japanese-style outcome for the U.S.," St. Louis Fed President James Bullard (right) said in a paper released Thursday. He says the best bet for avoiding that sort of slowdown is another round of Fed asset purchases."


Read rest of story from fortune.com

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