• Discussed targeting bond yields, price targeting in October video conference
  • Saw risks from targeting yields

CNBC is screaming about this phrase, saying it is the smoking gun proving that the Fed is trying to cheapen the buck. To me it is merely stating the state of markets in the run up to the November meeting.

In light of asset market developments over the intermeeting period, which in large part appeared to reflect heightened expectations among investors that the Federal Reserve would undertake additional purchases of longer-term securities, the November forecast was conditioned on lower long-term interest rates, higher stock prices, and a lower foreign exchange value of the dollar than was the staff’s previous forecast. These factors were expected to provide additional support to the recovery in economic activity.

Here is a frantic take on the Fed stating what any first year economics student knows is bleedingly obvious: Easiermonetary conditions lead to faster growth, all else held equal.

Text here

Downgraded forecasts here