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Fed Ready to Buy Treasuries | by Your Online Online cash advance Store
Your online online cash advance store keeps you informed about the nation’s financial crisis.
The Federal Reserve recently has changed its focus from interest rates to emergency credit online cash advance programs. Today it announced it is ready to start buying Treasury securities in order to resuscitate lending. The federal interest rate last month was dropped to nearly zero, and for the time being the powers that be intend to keep it that way. Now the organization turns its attention to improving conditions in private credit markets by buying long-term Treasuries.
The Fed also warned that the nation is facing the threat of inflation falling too low. Some economists are concerned that a long recession could even result in deflation. Check out this article from your online online cash advance lender to read about the causes and effects of deflation.
Thought the online cash advance Fed has said it is prepared to buy Treasury securities, it has stopped short of saying that it will actually begin the process. Any purchases made between now and the Federal Open Market Committee’s next meeting must be put to a vote. The FOMC meets next in March.
While the Fed’s focus on emergency credit programs is lessening panic in the markets right now, it does not promote growth. As long as the federal interest rate stays so close to zero the markets will not experience growth.
Not enough inflation
Economists predict that inflation will go up only 0.78 percent this year, which is about a point below the normal level. Regular inflation fosters economic growth and helps keep prices stable. online cash advance Without inflation, the gross domestic product will continue to decrease or stay stagnant, and the recession will continue.
Some economists are still concerned about the threat of deflation, which will cause more business closings and job online cash advance losses. The only real defense against deflation is consumer spending. The theory is that if financial institutions resume normal lending, consumers will resume a level of spending that is closer to normal.
So what do you think? After the country’s recent financial hardships, will consumers go back to their old ways of borrowing and spending? You can leave your comments here, on your online cash advance source.
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