FED: Considering Three Options for next Easing

As reported by Wall Street Journal’s ace Fed reporter, Jon Hilsenrath, the Federal Reserve is considering three options for it September 20 – 21 meeting’s next round of easing. They are the following:

1. The “Operation Twitst” wherein they will extend the duration of the Fed’s bond portfolio by selling the short-end, and purchasing more long-dated bonds. That way, the end of the curve would push lower.

2. Reduce the interest on excess reserves that banks hold with the Fed, so that they can hold fewer reserves and lend more money.

3. Fed will use a clearer language to emphasize that they will hold very low rates for a long time.

For further details, visit Jon Hilsenrath’s WSJ article.

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