The Fed admits it’s running low on ammunition , page 1

Fed says it’s running out of bullets: Marketwatch

For the first time since the financial crisis started five years ago, the Federal Reserve has at last made its first signal that its extraordinary loose monetary policy will start to get tougher.

To be sure, the change isn’t gigantic. There’s no sense that interest rates will increase from the near zero levels that have lasted for over four years.

And the Fed only last month initiated a new bond-buying program, to top off a plan to add more mortgage-backed securities that had only been around since September.

But, the minutes show, the central bank is starting to say, enough is enough. Of the crowd that supported bond buys, a few say they should continue until the end of the year, and several said it could stop, or slow, well before then.

There are two possible alternatives. One is that the Fed is expecting a big upturn in the economy, so that there just won’t be a need for more juice in the form of bond purchases.

That’s not really the case, however. The Fed only expects the unemployment rate in the mid-7% range by the end of the year, from 7.7% in November. And they don’t forecast any serious inflation issues, either.

So the alternative explanation is that the Fed just doesn’t think there’s much benefit to bond buys for the broader economy. The minutes say the program to buy MBS has been “effective” but also that the benefits were “uncertain” and that risks are growing as the balance sheet rises.

To put it differently: the Fed thinks the economy isn’t that great and there’s very little inflation to worry about, but its primary program to improve the economy doesn’t do very much.

It’s a clear admission the Fed is running out of gun powder. And that’s quite a shot it has fired to the markets.

What do ATSers make of this turn in policy view from members of the Fed? I like this article because it is the only one I have seen in the media that suggests the Fed is admitting its programs are becoming less effective.

There's speculation that the Fed might be seeing an improvement in the economy over the next months as this article suggests and challenges, to the Fed becoming increasingly concerned over risks from the continued exercise of their programs.

Anyone else have other thoughts or considerations?

reply to post by surrealist

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The "Federal Reserve" is a failed experiment.

And guess what, they were created to avoid financial melt downs (allegedly), yet every major financial catastrophe has occurred during their watch. They have either caused or prolonged every financial implosion in our nation's history.

They are clueless not only about economics in general, but even about their OWN policy.

reply to post by surrealist

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the {FED) Reserve is just playing the branches of government... the FED is urging the deficit spending congress & administration to spend-spend-spend so as to get a good head of steam in inflation


the FED as it is now with some $3 Trillion in bad bank paper has exhausted all its means to disburse financial largesse to the member TBTF banks & market makers... the $80 Billion the FED averages on fees for allowing the printing presses to run 24-7 making devalued Dollars for the administration & Congress to spend is on a converyor belt motion a guaranteed income to help balance the completely Red Balance Sheet accrued since the 2007-2008 implosion


the FED is throwing out a bait dead fish to troll the lawmakers...
Because in 2013 pretty much no Sovereign Nations will be buying US Bonds or Treasuries
So as the last resort the FED will need to absorb the extra $80 Bn monthly in national debt bonds/treasuries because the Banks will not buy them directly either, the risk is too high that another downgrade is in the immediate future



the whole twisted and snarled financial system is beyond repair... watch the FED trade the USA debt paper for national resources and real property & take over things like National Parks in the near future

reply to post by surrealist

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lets continue to wake up the people to the truth!!

no longer will the average peoples ignorance be their strength!!


in 2013!!!







now even their own policies have NOT!!

and will NOT help!!

get the word out!!

from there web site


from what they say it's never going to go away

reply to post by surrealist

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They could always hypothecate some hypothetical gold or borrow some real ammo from DHS and sell it into the market also.

Originally posted by CosmicCitizen
reply to post by surrealist

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They could always hypothecate some hypothetical gold or borrow some real ammo from DHS and sell it into the market also.

I guess they are talking about issuing a Platinum Coin now....not the American Eagle Platinum coin but one coin for a Trillion Dollar denomination that the Treasury would put on deposit with the Federal Reserve as collateral to avoid the laws regarding printing of paper money. Talk about "smoke and mirrors" (make that platinum backed instead of silvered mirrors).

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