Government

The Fed's Trillion-Dollar Monetary Stimulus

Today’s disappointing economic news—consumer sales last month grew less than expected—has fueled debate over whether Congress should pass another huge stimulus.  But another trillion-dollar fiscal stimulus won’t be politically possible. Not during a tough election year.

And, as Adam Davidson reports, the debate is moot for yet another reason: the Federal Reserve beat Congress to the punch.  This week, the Fed did something awfully similar to announcing a huge new stimulus.  Just without all the fanfare.

Over a year ago, the Federal Reserve bought an unprecedented $1.25 trillion worth of mortgage-backed securities.  The plan was to only hold the securities for a short period and then sell them.  But this week, the Fed announced: not so fast.  They are holding onto the securities and effectively easing monetary policy.

Listen to Adam Davidson’s full report on the Fed’s monetary stimulus.

Comments

 

Please keep your community civil. All comments must follow the NPR.org Community rules and terms of use, and will be moderated prior to posting. NPR reserves the right to use the comments we receive, in whole or in part, and to use the commenter's name and location, in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.