FOMC stays course on rates, plans new moves

September 21, 2011

FOMC stays course on rates, plans new moves

The Federal Open Market Committee on Wednesday reiterated its pledge to keep the federal funds target rate at a range of zero to 0.25 percent "at least through mid-2013" and announced new moves, including a controversial measure designed to keep long-term borrowing costs down.

That measure is based on a tactic called "Operation Twist" that was used during the early 1960s. It involves the Federal Reserve selling an amount of short-term securities equal to the amount it buys in long-term securities. The intended result is downward pressure on longer-term interest rates. The FOMC said it will complete the purchases by the end of June 2012.

While detractors of the new policy, which include Republicans in Congress, say it could heighten inflationary risks, the consensus view within the FOMC is that inflation will settle at acceptable levels over the coming quarters and give the central bank some room to maneuver.

The FOMC also said it is aiming to keep mortgage rates low by rolling over its investments in agency mortgage-backed securities. It also reaffirmed its intention to keep a stable balance sheet by reinvesting in maturing Treasury securities.

The decision to put these measures in place comes as the economic recovery continues to stall. Once again, the group's policy statement cited slow economic growth. It specifically noted that household spending has seen only a modest improvement as the labor and housing markets continue their slump.

Three FOMC members dissented in Wednesday's vote, preferring to keep monetary policy unchanged.

Related Resources

April 24, 2024 Add to Calendar 2024-04-24 14:00:00 2024-04-24 14:00:00 Optimize Liquidity, Maximize Loan Growth: The Network Lending Advantage About The Webinar Join us to learn more about network lending, a cooperative model allowing credit unions to optimize liquidity and achieve loan growth. Discover how credit unions can participate in loan pools with other institutions, allowing them to diversify portfolios, access loans with potentially lower risk and higher yields, and expand lending capacity without necessarily needing a surge in deposits. Delve into how credit unions can pool their resources, set common underwriting and pricing standards, and collectively originate, buy, and sell loans to optimize liquidity management. Hear from your peers about best practices, case studies, and practical strategies to harness the full potential of network lending and how it's helped their credit unions. Don't miss this valuable opportunity to learn how to strengthen your credit union's position in today’s competitive environment. Key Takeaways: How network lending differs from traditional lending The benefits of participating in loan pools with other credit unions How credit unions can set common underwriting and pricing standards and collectively originate, buy and sell loans to optimize liquidity management Why network lending is critical to loan growth Register Here Web NAFCU digital@nafcu.org America/New_York public

Optimize Liquidity, Maximize Loan Growth: The Network Lending Advantage

preferred partner

LendKey

Webinar

April 23, 2024 Add to Calendar 2024-04-23 14:00:00 2024-04-23 14:00:00 Monitoring the Latest Litigation Risks Credit unions’ operations pose litigation risks, with more of these cases being filed as class action lawsuits. In this Monitoring the Latest Litigation Risks for Credit Unions webinar, you’ll review some of the specific kinds of lawsuits impacting credit unions and what potential claims could be on the horizon. You’ll also examine some options for mitigating risks. Key Takeaways Review the current lawsuit trends. Understand the potential claims risks Explore options for mitigating risks. Register Now $295 Members | $395 Nonmembers(Additional $50 for USB)One registration gives your entire team access to the live webinar and on-demand recording until April 23, 2025Go to the Online Training Center to access the webinar after purchase » Who Should Attend NCCOs NCRMs Compliance and risk titles Education Credits NCRMs will recieve 1.0 CEUs for participating in this webinar NCCOs will recieve 1.0 CEUs for participating in this webinar Web NAFCU digital@nafcu.org America/New_York public

Newsroom