Monday, December 01, 2008

Bernanke: Fed may buy Longer-Term Treasuries

by Bill McBride on 12/01/2008 02:58:00 PM

From Bloomberg: Bernanke Says Fed May Buy Treasuries to Aid Economy

“Although further reductions from the current federal funds rate target of 1 percent are certainly feasible, at this point the scope for using conventional interest-rate policies to support the economy is obviously limited,” Bernanke said in prepared remarks to the Austin Chamber of Commerce.

One option is for the Fed to buy “longer-term Treasury or agency securities on the open market in substantial quantities,” Bernanke said. “This approach might influence the yields on these securities, thus helping to spur aggregate demand.”
Here is Bernanke's speech: Federal Reserve Policies in the Financial Crisis