Federal Reserve Signals Intent to Complete QE2

Bernanke

From The Economic Collapse

As reported by Scott Lanman and Joshua Zumbrun :

Federal Reserve Chairman Ben S. Bernanke said the end of the Fed’s $600 billion bond-buying program in June probably won’t have a “significant” effect on financial markets or the economy, and the central bank will likely continue reinvesting maturing debt after June.

“We are going to complete the program at the end of the second quarter,” he said at his first press conference following a policy meeting. “The end of the program is unlikely to have a significant effect on financial markets or the economy.”

Bernanke spoke after the central bank today reiterated its view that surging commodity prices are likely to have a transitory effect on inflation and agreed to finish its program of large-scale asset purchases on schedule. In his press conference, Bernanke said the central bank is likely to continue reinvesting its securities holdings, including mortgage-backed securities, as they mature even after June.

“We are going to continue to reinvest maturing securities, both Treasuries and MBS, so the amount of securities that we hold will remain” approximately constant, he said. “The amount of monetary policy easing should remain constant going forward from June.”

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