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Pastimes : Clown-Free Zone... sorry, no clowns allowed

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To: Terry Maloney who wrote (417824)9/21/2011 2:36:25 PM
From: Broken_Clock  Read Replies (1) of 436258
 
Fed to shift $400B in holdings to boost economyFed shifts makeup of bond holdings to drive down long-term rates, latest move to boost economy

Martin Crutsinger, AP Economics Writer, On Wednesday September 21, 2011, 2:25 pm
WASHINGTON (AP) -- The Federal Reserve says it will sell $400 billion of its shorter-term securities to purchase longer-term holdings, its latest effort to boost a weak economy.

The Fed's move to rebalance its $2.87 trillion portfolio could lower Treasury yields further. Ultimately, it might reduce rates on mortgages and other consumer and business loans.

Fed policymakers announced the move Wednesday after a two-day meeting. Three members dissented from the decision.

Many analysts have said the shift in the Fed's portfolio could provide modest help to the economy by reducing borrowing costs and perhaps raising stock prices. Others say it won't help and warn that the move could escalate inflation.

In June, the Fed completed a $600 billion bond-buying program that may have helped keep rates low.










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