Tuesday, December 16, 2008

The Fed is Petrified

You can read the text of the Fed's statement here.

A quick summary:

  • Cut fed funds to a target range between zero and 0.25%
  • Cut discount rate to 0.5%
  • Will support financial markets by purchasing agency debt and MBS
  • Will look to possibly purchase longer term Treasuries
  • Will consider other methods to use its balance sheet to support markets and economic activity
  • Labor market conditions have deteriorated, credit is strained, the economic outlook has weakened significantly
  • If you can think of anything else the FOMC can do to further dump liquidity on the market, please send them a note...

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