FILE PHOTO: The Federal Reserve building is pictured in Washington, DC, U.S., August 22, 2018. REUTERS/Chris Wattie
“If we were seeing a real uptick in real yields, that would give me pause, that would give me concern that the amount of accommodation we are providing to the economy is reducing, and that might warrant us considering a policy response,” Minneapolis Federal Reserve Bank President Neel Kashkari noted.
Under a new policy framework adopted last year, the Fed has promised to keep rates at their current near-zero level until the economy reaches full employment and inflation hits 2% and looks headed above it. It is also buying $120 billion in bonds a month to further pin down borrowing costs.The moves in the Treasury market, Kashkari said Friday, suggest that the new framework is helping to push inflation up and “providing the kind of accommodation that we hoped it would.
Ease policy further? As it is, The Fed is doing easy money contortion acts so even the most irresponsible corporations are recipients of extraordinary corporate welfare, to the tune of trillions of dollars, & counting, for Fed bond buybacks, stock purchases, & sweetheart loans.
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