The WSJ's ace Fed reporter Jon Hilsenrath says the Fed is considering 3 options for further easing at its two-day meeting september 20-21.
1 .So called "operation twist." Extending the duration of the Fed's bond portfolio by selling the short-end and buying more long-dated bonds, to push the end of the curve even lower
. 2.Another possibility is to reduce the interest on excess reserves that banks hold with the Fed as a spur to hold fewer reserves and lend more money
. 3.Finally, the Fed might use even clearer language to emphasize that it will hold rates very low for a long time.
1 .So called "operation twist." Extending the duration of the Fed's bond portfolio by selling the short-end and buying more long-dated bonds, to push the end of the curve even lower
. 2.Another possibility is to reduce the interest on excess reserves that banks hold with the Fed as a spur to hold fewer reserves and lend more money
. 3.Finally, the Fed might use even clearer language to emphasize that it will hold rates very low for a long time.
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