- Cutting rate paid on excess reserves could lower medium, long-term rates
- stronger promise for low rates for even longer would reduce medium, long-term rates
- More Fed purchases of Treasuries would have non-trivial effect on forward rate guidance
On the economy, the Minneapolis Fed president lowered his outlook
- Cuts outlook for 2011 to 2.5% from 3.0%
- Recovery is distinctly modest
- lack of vitality in job market is disturbing
- Sees unemployment above 8% well into 2012
Sounds like he is on board for more “non-standard” measures, if need be…
