New York Fed details QE3 bond purchase plan

[Roland99]

Source: MarketWatch

- The New York Fed said it will start buying agency mortgage-backed securities on Friday, at a rate that is expected to total $23 billion over the remainder of September. It will then purchase securities at a clip of $40 billion each month. The New York Fed said it will concentrate its purchases in newly-issued agency MBS in the to-be-announced market, although it may purchase other agency MBS if market conditions warrant

http://www.zerohedge.com/news/fed-folds-will-do-open-ended-mbs-buying-extends-operation-twist

*FED TO KEEP POLICY STIMULATIVE FOR `CONSIDERABLE TIME'
*FED WILL ADD TO PURCHASES IF LABOR MARKET DOESN'T IMPROVE
*FED DOES NOT SAY WHEN MBS PURCHASE PROGRAM TO END
*FED TO BUY $40B MBS MONTHLY, CONTINUE `OPERATION TWIST'
*FED TO BUY MBS, EXTENDS ZERO-RATE POLICY INTO 2015



Read more: http://www.marketwatch.com/story/new-york-fed-details-qe3-bond-purchase-plan-2012-09-13?link=MW_home_latest_news

[Roland99]

1. Full text of FOMC statement

http://www.marketwatch.com/story/text-of-fed-statement-on-qe3-2012-09-13

“Information received since the Federal Open Market Committee met in August suggests that economic activity has continued to expand at a moderate pace in recent months. Growth in employment has been slow, and the unemployment rate remains elevated. Household spending has continued to advance, but growth in business fixed investment appears to have slowed. The housing sector has shown some further signs of improvement, albeit from a depressed level. Inflation has been subdued, although the prices of some key commodities have increased recently. Longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee is concerned that, without further policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions. Furthermore, strains in global financial markets continue to pose significant downside risks to the economic outlook. The Committee also anticipates that inflation over the medium term likely would run at or below its 2 percent objective.

To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee agreed today to increase policy accommodation by purchasing additional agency mortgage-backed securities at a pace of $40 billion per month. The Committee also will continue through the end of the year its program to extend the average maturity of its holdings of securities as announced in June, and it is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities. These actions, which together will increase the Committee’s holdings of longer-term securities by about $85 billion each month through the end of the year, should put downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.

The Committee will closely monitor incoming information on economic and financial developments in coming months. If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of agency mortgage-backed securities, undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved in a context of price stability. In determining the size, pace, and composition of its asset purchases, the Committee will, as always, take appropriate account of the likely efficacy and costs of such purchases.

To support continued progress toward maximum employment and price stability, the Committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economic recovery strengthens. In particular, the Committee also decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that exceptionally low levels for the federal funds rate are likely to be warranted at least through mid-2015.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Dennis P. Lockhart; Sandra Pianalto; Jerome H. Powell; Sarah Bloom Raskin; Jeremy C. Stein; Daniel K. Tarullo; John C. Williams; and Janet L. Yellen. Voting against the action was Jeffrey M. Lacker, who opposed additional asset purchases and preferred to omit the description of the time period over which exceptionally low levels for the federal funds rate are likely to be warranted.”

[DeSwiss]

2. Yes, yes, yes, please.....

...let us keep on buying-up old debt that was created from nothing, with more new debt that is created from nothing and that should fix everything.

- I mean everyone knows that nothing from nothing leaves... er... um... Billy Preston.......

K&R

This is the same song they play continuously on the Muzak speakers at the Federal Reserve.....

[Panasonic]

3. Gold shot up... Way up. $35/oz today.

We have some pending purchases we bought at margin, and now have made a nice profit, thanks to the Fed's decision.

[Roland99]

4. helps me in my bid to refi my mortgage

sorry, America.

[BadgerKid]

5. Crikey! (graph)

[Po_d Mainiac]

6. Shhhh

What PM's do is an unwanted side effect. As will be the rise in D2D commodities coupled with the price of fuel.

All that matters to the chairsatan is that the climb in the R2K never stalls.

[pam4water]

7. They know this will make things worse, by driving up gas and food prices. Why don't do some thing

else. This is at least the fifth big give away of money to that already rich. Counting TARP the other two QEs and the big lines of credit give out by the FED that never got much press. QE2 cause an economic contraction so will QE3.