Federal Reserve Meeting Minutes - Cheap $$ r us

The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period.

The above quote is from the Federal Reserve meeting minutes.

They also purchased $1.25 trillion in MBSes (mortgage backed securities) and $175 billion of agency debt. $1.25 trillion. That is one scary number and we still cannot get derivatives reform?

The Fed is also letting a host of special liquidity funds expire on 02.01.10.

These facilities include the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility, the Commercial Paper Funding Facility, the Primary Dealer Credit Facility, and the Term Securities Lending Facility. The Federal Reserve will also be working with its central bank counterparties to close its temporary liquidity swap arrangements by February 1. The Federal Reserve expects that amounts provided under the Term Auction Facility will continue to be scaled back in early 2010. The anticipated expiration dates for the Term Asset-Backed Securities Loan Facility remain set at June 30, 2010, for loans backed by new-issue commercial mortgage-backed securities and March 31, 2010, for loans backed by all other types of collateral. The Federal Reserve is prepared to modify these plans if necessary to support financial stability and economic growth.

Helicopter Ben, now Time's Man of the Year is up for a Senate Banking committe vote tomorrow. Freshman Senator Jeff Merkeley has just accounced he will vote no. There are currently 5 holds on Bernanke's confirmation on the Senate floor.

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The Fed needs to be careful

The Fed needs to be careful keeping the rate that low for that long. Inflation will start creeping up.