Monday, January 26, 2009

What's The Plan (Uncle) Sam?

On Tuesday, Ben Bernanke and the Federal Open Market Committee (the central bank's lead policymaking group) begin two days of meetings to assess market conditions, review the effectiveness of current programs, and address future action plans in the housing, credit, and financial markets. The committee is expected to keep the Fed fund rate at its current zero to .25% range. With no more room to move (can't go less than zero) the Fed is considering other options for reducing long-term borrowing costs. But with investor reaction so wildly unpredictable, any move comes with a great deal of risk. The Fed is considering several ideas, including purchasing long term Treasury securities.

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