What nobody noticed As I painted a doom a possible picture, I thought someone would present a counteracting post. But not even youwere up to date on developments.
Normally when the pre conditions for a recession are present the analysts and law makers fail to act. For fear of being criticsized ot making a mistake. By the time they do take action it is to late to correct the situation.
Be thankfull Donald Trump doesn't care what the opposition thinks. And is smart enough to recognize the problem before it was to late.
The US economy has displayed signs of faltering over the last 5 months. Since end of June Trump has consistantly called on the fed to lower interest rates a bit to support the country's economy. Heading off a US and world recession. He was ridiculed by Democrats and the Media for doing so.
It took the chairman of the US Federal Reserve utill late august to understand Trump was right and ahead of the curve in his assessments. Finally the Federal Reserve is acting to head off the comming downturn threat seen by President Trump.
With the action being taken the economy should remain bullish till at least 2021. This is good news for businesses lumber producers, their employees, Investors and the public in general , on both sides of the border.
What is needed now is cooler heads, a little less greed and return to work while good times last.
Read the Copy and Pasted
report below ;
The Federal Reserve will begin buying Treasury bills on Tuesday to boost its balance sheet and avoid a recurrence of the unexpected strains experienced in money markets last month, the central bank said in a statement.
The Fed will begin initial purchases of $60 billion in Treasurys over the month beginning next Tuesday. The central bank said it would continue purchases of Treasury bills of unspecified amounts into the second quarter of 2020.
The Fed's rate-setting committee met by videoconference last Friday, Oct. 4, to discuss recent developments in money markets. It voted unanimously on the plans to purchase Treasury bills to grow its balance sheet.
The central bank said the actions announced Friday were "purely technical measures to support the effective implementation" of the committee's policy setting "and do not represent a change in the stance of monetary policy."
The Federal Open Market Committee last agreed on a policy decision in between its eight regularly scheduled annual meetings in May 2010, when it reopened a lending program with foreign central banks to alleviate funding pressures growing out of Europe's fiscal crisis.
Fed officials stopped shrinking the assets on their balance sheet in August but never said when they would allow them to grow again. As a result, a crucial liability on the balance sheet -- bank deposits held at the Fed, called reserves -- has continued declining.
Stresses in very-short-term funding markets last month suggested banks have grown reluctant to lend those reserves. Officials hadn't said until Tuesday when they would allow reserves to grow again to avoid further scarcity issues from roiling funding markets.
"That time is now upon us," Fed Chairman Jerome Powell said in a speech Tuesday in Denver.
The Fed has been purchasing up to $20 billion of a range of Treasury securities since August to replace maturing mortgage securities. The $60 billion of monthly bill purchases announced Friday will be added to those existing purchases.
Reserves dropped to less than $1.4 trillion last month, from $2.8 trillion in 2014, when the Fed stopped buying assets. Most of the decline occurred over the past two years after the Fed pared its asset holdings by allowing some bonds to mature without replacing them.
The goal will be to rebuild the level of reserves in the system to levels that prevailed in early September, the central bank said. Reserves stood at $1.5 trillion at that time.
The Fed said Friday it will adjust the timing and amounts of Treasury purchases and other temporary funding operations "as necessary to maintain an ample supply of reserve balances over time and based on money market conditions."
Mr. Powell emphasized that the moves are aimed at maintaining a firm grip on very-short-term lending rates -- and not to provide economic stimulus, as the Fed did between 2008 and 2014 by purchasing longer-dated Treasury and mortgage securities in successive campaigns sometimes referred to as quantitative easing, or QE.
"This is not QE," Mr. Powell said Tuesday. "In no sense is this QE."
Rather than purchase longer-dated securities, officials will instead buy shorter-dated Treasury bills. Officials believe holding long-term securities boosts the economy and financial markets by lowering long-term rates and driving investors into stocks and bonds. They think a portfolio weighted toward shorter-term securities provides less or no stimulus.
The Fed's balance sheet has swelled to nearly $4 trillion from $3.8 trillion over the past month because the New York Fed has been conducting temporary overnight and short-term lending operations to restore liquidity to a key very-short-term funding market.
The Fed also said Friday it will continue to conduct those short-term and overnight repurchase agreement operations, known as repos, at least through January of next year. It will initially offer at least $35 billion of term repo operations, generally twice a week. Overnight repo operations will take place daily, initially in an offering amount of at least $75 billion per operation, the Fed said.