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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: JRI who wrote (6508)11/2/2002 1:07:30 PM
From: Elroy JetsonRead Replies (1) | Respond to of 306849
 
Wouldn't it be inflationary if the Fed bought bonds with newly printed money?

Well, yes - that's the point. They've been buying short-term securities from banks with newly printed money for two years. They're trying to fight deflation. But this only lowers short-term rates.

Buying long-term bonds (Government and Fannie Mae) with newly printed cash would just be a new wrinkle. One designed to both inflate and lower long-term rates.


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