Fed officials dissatisfied with recovery

Nov. 28, 2012 at 7:51 PM
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WASHINGTON, Conn., Nov. 28 (UPI) -- U.S. Federal Reserve decision makers say they are not satisfied with the pace of the economic recovery, suggesting that securities purchasing will be extended.

"I am not prepared to say we are remotely close to substantial improvement on the employment front," Atlanta Fed President Dennis Lockhart said in a recent speech.

In a speech given at the New York Economic Club, Fed Chairman Ben Bernanke said unemployment is "well above" what it should be -- and high unemployment is among the top criteria officials have said would trigger a central bank intervention.

The Fed is currently buying $45 billion worth of treasury securities each month through Operation Twist, a program in which it allows short-term treasuries to mature and then turns the proceeds around to fund purchase of longer-term treasuries.

That program is scheduled to stop at the end of the year.

The Wall Street Journal reported Wednesday that the Fed is also buying $40 billion in mortgage securities each month.

Should decision makers decide to extend the program of purchasing fresh securities, critics will certainly become vocal about inflation, as that type of quantitative easing is accomplished by the Fed printing money.

But the Fed's Beige Book report released Wednesday, said the 12 bank regions were reporting only "modest improvements in hiring activity," with at least two districts -- Richmond, Va., and Cleveland had noted hiring remained weak.

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