Today's press conference was the usual sycophantic ho-hum, except towards the end. Bernanke volunteered (not even responding to a specific question on the matter) that if interest rates quickly rise, the Fed could stop remittances to Treasury for a few years (emphasis on "years," plural). That's the first I've heard anyone at the Fed give any kind of time estimate on this phenomenon. Clearly, the matter is in the Fed consciousness.This, of course, will only mean that the Treasury will have to raise more money via Treasury debtsecutity sales (which the Fed will end up buying in roundabout manner), but it is indicative of how unstable and unpredictable Fed operations are right now.
Wednesday, December 18, 2013
Takeaway from Bernanke Press Conference: Fed May Stop Remittances to Treasury for Years
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