Federal Reserve : Pushing on a String
September 14,2012
the staff of the Ridgewood blog

Ridgewood NJ, The Federal Reserve fulfilled expectations by priming the pump for the faltering US economy, taking aim at driving down mortgage rates until there is an improvement in employment picture. The central bank has already admitted that the bleak jobs picture will remain a problem for years to come.

The Fed said yesterday that it will buy $40 billion of mortgage-backed securities per month in an attempt to foster a nascent recovery in the real estate market. The purchases of mortgage-backed securities will be open-ended, which means that they will continue until the Fed is satisfied that economic conditions, primarily in unemployment, improve.

Critics likened FED attempts for stimulate the economy to “pushing on a string ” and called it an attempt by the FED to paper over the real problems of over regulation, high taxes , inflation and an anti business sentiment in Washington  , They stress the excess liquidity only ends up adding to inflation and pushing up the stock market , perhaps setting the stage for a future stock market bubble.

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