"How the Fed Chairman Steered the Central Bank His Way." So runs the headline in Friday's WSJ. It turns out that Ben Bernanke lobbied and pressured members of the Fed for his all-out, stimulative program, a program which was aimed at buoying economic activity and boosting employment. The Fed will buy $40 billion of mortgage-backed securities every month -- and for the first time the Fed will keep buying until the US job market substantially improves. On top of that, the Fed's "Operation Twist" would buy a monthly $40 billion of long-term bonds -- the money to be raised through the sale of shorter term bonds -- with the aim of driving long rates down and thereby pushing up the value of homes, stocks and other financial assets. All this with the hope that "Twist" will push households and businesses into spending, investing and hiring.
Will it work? We'll see. But what ... Log in or subscribe to continue reading.
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