The Fed’s Shift in Policy, Plus RMDs


The Federal Open Market Committee (FOMC) voted to shift its monetary policy yesterday. Monthly purchases of agency mortgage-backed securities and longer-term Treasury securities will each be reduced by $5 billion, to $35 billion and $40 billion, respectively. This tapering is significant in that it represents the beginning of the end of quantitative easing, but it is subtle in terms of the likely short-term impact on the economy.

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