ECONOMYNEXT – The US Federal Reserve has announced a 120 billion dollar a month money printing program to inject liquidity, keep rates down and ignite inflation amid fears of a commodity bubble.
It was hoping that unemployment will go down in the process.
The Fed Open Markets Committee said it will “increase its holdings of Treasury securities by at least $80 billion per month and of agency mortgage backed securities by at least $40 billion per month until substantial further progress has been made toward the Committee’s maximum employment and price stability goals.”
The FOMC said it will keep interest rates between 0 to 0.25 percent until inflation goes above 2 percent.
It was hoping unemployment will go down.
“The Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the Committee’s assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time,” it said.