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Fed Up? Meeting Minutes Show Fed Worried About Never-Ending Stimulus Programs

Jan. 3, 2013 4:15pm Becket Adams

Despite agreeing last month to a fourth round of quantitative easing (i.e. “QE4-Ever”), minutes from the Federal Open Market Committee’s (FOCM) Dec. 11-12 meeting show that Fed policymakers were split over the open-ended $85 billion a month bond purchasing strategy.

“Minutes of the Fed’s December policy meeting show that some of the 12 voting members thought the bond purchases would be warranted through the end of this year,” the Associated Press notes.

“Others felt the purchases should be slowed or stopped altogether before the end of 2013. This group was concerned that too much bond buying by the Fed might destabilize the economy,” the report adds.

What this means is that the Fed might actually pull the plug on its easing policies earlier than we had originally thought. It also means that the Fed could be looking in the opposite direction (i.e. “tightening”).

Sensing that the Fed might actually consider a more “austere” approach to the nation’s economic woes, markets did not respond well at all.

Here’s how the Dow reacted:

The Nasdaq: And the S&P 500:

MARKETS:

The Fed said it planned to keep a key interest rate low even after unemployment returns to normal levels (whenever that happens), the Fed announced in a statement after the meeting,

“Chairman Ben Bernanke warned at a news conference after last month’s meeting that no Fed actions could outweigh the damage that would result if the economy fell off the fiscal cliff,” the AP notes.

“Congress’ agreement this week was probably roughly in line with what Fed officials had expected,” the report adds. “As a result, they expect no changes soon to the Fed’s policies. Its federal funds rate, a benchmark for many consumer and business loans, has remained near zero since December 2008.”

Here are the key quotes from the December meeting (h/t Zero Hedge, emphases theirs):

While almost all members thought that the asset purchase program begun in September had been effective and supportive of growth, they also generally saw that the benefits of ongoing purchases were uncertain and that the potential costs could rise as the size of the balance sheet increased. Various members stressed the importance of a continuing assessment of labor market developments and reviews of the program’s efficacy and costs at upcoming FOMC meetings.

In considering the outlook for the labor market and the broader economy, a few members expressed the view that ongoing asset purchases would likely be warranted until about the end of 2013, while a few others emphasized the need for considerable policy accommodation but did not state a specific time frame or total for purchases. Several others thought that it would probably be appropriate to slow or to stop purchases well before the end of 2013, citing concerns about financial stability or the size of the balance sheet. One member viewed any additional purchases as unwarranted.

And here is the full FOCM report:

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Comments (50)

nothinghere
Posted on January 4, 2013 at 9:59am
plain english,we did what we could to get o’bama re-elected,and tried ben’s keysesian theory,in doing so we’ve put americas,credit-rating,and financial stability in jeopardy,now were going to stop,we apoligize ahead of time for the,(as we keyesians call them),the unintended,(but forseeable) conseiquences that are coming.
timmy can run,but he can’t hide,when the debt-limit hearings start,i want him,bernake a handful of unelected officials,5-6 big bankers,and a couple creditable,bi-patisian economist, in front of congress,to truthfully tells us,how many trillions of tax-payer dollars were laundered through these big banks to cover up for an economy that never even started to get better,and the tax-payer liablity you added playing these behind the scenes games with tax-payer dollars.
nothing has changed,to fiscally help out america since 2008,everything thats been done has,(i my mind),been an agenda driven redistribution policy,and cronism.
economist are stating were worse off than 2008.
we have elected officials who still blame bush,the japan tsunami,tonadoes,hurricanes,droughts,and snowstorms,for our financial troubles,worse than a 5 yr.old child,always,always,someone elses fault for everything,it’s sickening.
americans have not had any honest statistical numbers in 4yrs.,you can’t run your personal life,let alone a business with faulty,dishonest numbers,and with o’bama-care they change daily.

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- michaelmoron
  Posted on January 4, 2013 at 5:53pm
  “When the Federal Reserve Act was passed, the people of these United States did not perceive that a world banking system was being set up here. A super-state controlled by international bankers and international industrialists acting together to enslave the world for their own pleasure. Every effort has been made by the Fed (Reserve) to conceal its powers but the truth is — the Fed has usurped the government!”
  – Congressman Louis McFadden, Chairman of House Comm. on Banking and Currency from 1920 to 1931
  
  “The Federal Reserve is one of the most corrupt institutions the world has ever seen. There is not a man within the sound of my voice who does not know that this Nation is run by the international bankers.”
  – Congressman Louis T. McFadden
  
  “Some people think the Federal Reserve Banks are United States Government Institution. They are private credit monopolies which prey upon the people of the United States for the benefit of themselves and their foreign customers.“
  – Congressman Louis T. McFadden
  
  After a few unsuccessful attempts at his life, Louis T. McFadden was finally poisoned to death.
  
  Report this comment
- michaelmoron
  Posted on January 4, 2013 at 5:56pm
  Here is another person that was assassinated for attempting to dismantle the Federal Reserve PRIVATE BANK.
  
  http://www.youtube.com/watch?v=qYVCIdrcS6k
  
  Report this comment
woodyee
Posted on January 4, 2013 at 9:06am
Do you think Wall Street or the Repubs care that they’re being set up to bear the burden of blame when the fit hits the shan?

Heck no. They’re taken care of.

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Pitcher
Posted on January 4, 2013 at 7:47am
These guys also go a long way to change the numbers and add their BS. Using imputations and hedonics to BS us commoners.

Watch this 3 hr presentation and find out some of their trickery.
http://www.peakprosperity.com/crashcourse

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sbenard
Posted on January 4, 2013 at 12:27am
Bill Gross (world’s largest bond fund manager):
“Well ultimately government financing schemes such as today’s QE’s or England’s early 1700s South Sea Bubble end badly…The future price tag of printing six trillion dollars’ worth of checks comes in the form of inflation and devaluation of currencies either relative to each other, or to commodities in less limitless supply such as oil or gold… The inflationary dragons lurk in the “out” years towards which long-term bond yields are measured.”
Note: Gross is saying in that last line that he expect heft inflation in the 5-7 year range after the Fed began it’s money-printing. They’ve been at it nearly 5 years now!
“Bernanke’s dreams of economic revival, which would then lead to the day that investors can earn higher returns, may be an unattainable theoretical hope, in contrast to a future reality… But “costless” check writing does indeed have a cost and checks cannot perpetually be written for free.”

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sbenard
Posted on January 4, 2013 at 12:21am
Mutiny on the Bounty at the Fed!
The market reaction was instantaneous, but still somewhat muted.

What struck me about the FOMC minutes were these words: “few”, “several”, and “some”".
A “few” wanted to continue the money-printing indefinitely.
“Several” FOMC members wanted to end the money-printing by the end of 2013.
“Some” FOMC members wanted to halt the money-printing immediately.
That sounds like a consensus for ending the monetary mayhem. This shocked the market!

Apparently, even the central criminals — I mean bankers — are beginning to see the danger signs.

Meanwhile, also today, Bill Gross, who runs the world’s largest bond fund, was also sending up red flags, telling his investors that BIG inflation is coming, implying that we will start seeing it within the next 12-24 months. He also said that all this money-printing is breaking all the business models and creating still more uncertainty that can only hurt the markets.

And economist David Rosenberg characterized the “fiscal cliff” resolution as Congress just doing the easy things to kick the can, with the difficult part — the debt ceiling and the sequestration — delayed only until March 1st. That’s when the real fireworks begin, especially since Obama has declared that he will REFUSE to negotiate with Congress over the debt ceiling.
Trouble this way comes!

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BasketFullOfPuppies
Posted on January 3, 2013 at 11:29pm
Almost no one will say it. I will.

The emperor has no clothes.

The market has ceased to be an indicator of company productivity and effectiveness, and has become a bellweather of investor confidence. Without the propping up of the Fed, there is no semblance of integrity to the market, and it will fall… swiftly.

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- sbenard
  Posted on January 4, 2013 at 12:09am
  In other words, Bernanke’s blowing bubbles. Bubbles Bernanke!
  
  Report this comment
Advection
Posted on January 3, 2013 at 7:43pm
YA THINK unlimited currency printing might be a problem?! What was your first clue, Fed?

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- tonypro
  Posted on January 3, 2013 at 8:59pm
  This is such an obvious setup.
  
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woodyee
Posted on January 3, 2013 at 6:29pm
If those pigs were worried, they’d have tossed Bernanke from the top of a NYC tower to alert the media, and then used the media to get the word out to the rest of the U.S.

Worried my royal American arse…the wrong is so plain to see, even a few Liberals can see they’re just stalling the inevitable.

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OUTLAW_WEALTH
Posted on January 3, 2013 at 5:53pm
How long we gonna put up with this #(*&@ ?

We need currency freedom, we need our honest money back. We need liberty and freedom in our economics, no more of this central planning bankster BS!!!!!

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- mackadoo57
  Posted on January 3, 2013 at 8:18pm
  Obamas Plan. Support the lazy, Take away from the working class, Destroy America helped by Soros the Communist pig that Is a Jew from Europe, put everybody on welfare, depend on the Government to support you, take away your guns, your rights, schred the Constitution, make us like Greece, Have you ever noticed how many blacks have “HANDICAPPED PARKING SIGNS ON THEIR CARS” Doctors are afraid to deny them. We have a non citizen President that is Kenyan half white half black and Drs are afraid of discrimination. Discrimination has gone out the window. White Trash, Blacks that are predjudice voted for a welfare president to get food stamps and welfare that totals $3,500.00 a month of your tax payer dollars. There are 300 million Americans supporting 200 million lazy Americans. This has got to stop. One way is to do no deductions on your income tax and congress has no money to pay these lazy welfare recipients, disability insurance, and food stamp recipients. Save the money until the year. Congress will go broke for 2013.
  
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- CobraBill
  Posted on January 4, 2013 at 2:54am
  Mackado: 300 million Americans supporting 200 million Americans? Really?
  Your telling me there are 500 million Americans now in the US?
  Please look up the facts so you don’t look silly.
  
  Report this comment
dublinthewagons
Posted on January 3, 2013 at 5:12pm
Cold feet everywhere. Ben and Timmy leaving. Nobody wants to hold the bag anymore.
Ready to take what they have stolen and run. This administration & democrat party will let the general population crusify them. After all itw always somebody else’s fault. If they had just a little more time to set up the dictatorship and destroy the constitution. In short they are about to turn into canibals.

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- woodyee
  Posted on January 3, 2013 at 6:30pm
  “DemonicRat” party…
  
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thibx
Posted on January 3, 2013 at 5:03pm
i have never seen such stupidity in one city. we need a drone.

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Blazer58
Posted on January 3, 2013 at 4:56pm
These guys are really smart. You mean we cannot just keep adding more zero to the books. Never would of figured that one out myself. We are in such good hands nothing to worry about.
But what do you expect from a one trick pony. Except doing the same thing over and over.

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- BODYBAG
  Posted on January 3, 2013 at 5:16pm
  ““Others felt the purchases should be slowed or stopped altogether before the end of 2013. This group was concerned that too much bond buying by the Fed might destabilize the economy,” the report adds.”
  
  Really?
  
  /sarcasm off
  
  Report this comment
- dublinthewagons
  Posted on January 3, 2013 at 5:16pm
  Thy are predicting end of 2013, on the long side, social unrest, riots and shortly thereafter cival war.
  But what is my opinion worth? They know it is close. Prepare with all haste.
  
  Report this comment
RodT82721
Posted on January 3, 2013 at 4:46pm
I hink that until the citizens of this country have to pay for all this unnecessary spending they will never understand what our electee govt is doing to us.
The Fed is issuing all the dollars that they don’t have to spend from real revenues, so one has any idea what the real damage is to re-distributing the wealth of others. These are wothless dollars, and as they dilute the value of earned income, a minute amount and while the admistration keeps real inflation under a political contol by printing an borrowing, this entire mess is going to collapse and soon.
Whil the White House can lie about what they are doing, the real effects of their war on our economy can not be hid for long. Spending $2-4 Billion every day will take it’s toll. And when it does we are going to Greece all over again.
You really can’t fool mother natrue, or the laws of physics. JMO.

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MrKnowItAll
Posted on January 3, 2013 at 4:44pm
When I was a Child I always wondered why everyone can’t have everything. Now I know the Truth. Many people just cannot hold onto their money. I am definitely one of them. It’s like we were poor and no one ever taught me. I watched as they gave houses practically free to many low income family’s in many city’s around me. But no one Taught these people how to care for them. Don’t ever wonder what happened to Detroit outside of the Riots. Free Beautiful Houses. Six Months later. You could not give them away.

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- scuba13
  Posted on January 3, 2013 at 5:00pm
  If you want to hold onto your money, stop buying drugs and quit visiting the prostitutes on the corner.
  
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FANGS
Posted on January 3, 2013 at 4:35pm
At some point, Democrats will have to go down.

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- The_Jerk
  Posted on January 3, 2013 at 4:45pm
  Don’t sell these ruthless communists short. The Czar and his family made that same mistake, and an all Jewish communist cadre butchered them in a basement. They know what they are doing. They have learned from their Russian mistakes. Better know your history. It’s going to be repeated.
  
  Just as the Jewish Jacob Schiff and Max Warburg funded the Russian revolution, the Jewish George Soros is funding our American revolution. Max’s brother, Paul Warburg, brought us the Federal Reserve. Nothing is unrelated. The Communist Manifesto written by the Jewish, Karl Marx, provides the ‘how to.’
  
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- Shasta
  Posted on January 3, 2013 at 4:54pm
  Unfortunately, when they go down, they will take the entire country with them.
  
  Report this comment
RaydocX
Posted on January 3, 2013 at 4:32pm
They are lying about the worry or face a cold concussion clot episode a la secstate.
Funny they keep pushing bad policy but claim to be worried
When will those not radicalized on the Left stand up and say ‘enough’ to the would be American king

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The-Monk
Posted on January 3, 2013 at 4:31pm
” Federal Open Market Committee’s (FOCM)”

If FOCM is a slip-up for FOMC I think the acronym FOCM can be correctly pronounced.

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- revelation2012
  Posted on January 3, 2013 at 7:24pm
  o dear,,,
  
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JQCitizen
Posted on January 3, 2013 at 4:30pm
So we’re supposed to believe he was just injected with growth hormone, and it all went straight to his pants?

Not hardly!!! We’re still watching, Repubs!

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WildschweinJager
Posted on January 3, 2013 at 4:27pm
Start riding horses again. I heard they are “green”………..low carbon hoofprints. Gonna need blacksmiths, saddlemakers, carriage builders, street cleaners, hay, hitching posts..etc.

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civilwarcometh
Posted on January 3, 2013 at 4:26pm
So the rothchilds are worried about the U.S. LMFAO…There should have never been a FED in this country in the first place.

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- The_Jerk
  Posted on January 3, 2013 at 4:36pm
  Here’s why we do. Rothschild Brothers of London, 1863. “Give me control of a nation’s money and I care not who makes it’s laws”
  
  They are the ones who brought us into their London banking cartel.
  
  Report this comment
- civilwarcometh
  Posted on January 3, 2013 at 5:00pm
  @JERK: I see everyone on here attack you every day on here. They call you a jew hater. Yet 99% of the time you are correct. Now that i have said this they will start attacking me. I can say i never seen any of them show any proof that you are wrong. I know what you know but i think you have a heck of alot more research than i have. You know that old saying if you can’t fight the fact’s or prove them wrong with fact’s just pull an alinsky. Wich most on here do to you. I will never attack you keep telling the truth and maybe one day they will go find it out for themselves….
  
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- Fubared
  Posted on January 3, 2013 at 5:36pm
  Who doesn’t love a good nazi love story. Aw.
  
  Report this comment
- yiska8
  Posted on January 3, 2013 at 7:25pm
  Read the “Creature from Jekyll Island”. The Fed was created in secret driven by pure greed with the Fed Reserve Act of 1913. The Fed was basically created because the American private,small banking system worked extraordinarily well. Big Banking wanted full control and policitians were well greased with bribes and became very wealthy.We’ve been screwed financially ever since and stuck with ****** like Bernake and Geithner til China rolls in and plants their flag here.
  
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WildschweinJager
Posted on January 3, 2013 at 4:24pm
Learn to grow food, buy a cow, some chickens and some pigs. At least you will eat.

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The_Jerk
Posted on January 3, 2013 at 4:23pm
The Jewish banking cartel is taking us down. Almost too late to wake up.

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- Fubared
  Posted on January 3, 2013 at 5:53pm
  Go back to sleep nazi
  
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- tckid17
  Posted on January 3, 2013 at 5:56pm
  Pardon me, would you happen to have another Rothschild?
  
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ArmedAndReallyPissed
Posted on January 3, 2013 at 4:21pm
These idiots won’t care if the National Debt hits 100 Trillion. Keep spending. It won’t ever affect the New 1% ers of Washington.

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Cavallo
Posted on January 3, 2013 at 4:21pm
So the Fed is worried they are murdering themselves and us along with them because their techniques to spur economic activity DON’T F^#@ING WORK!

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Psychosis
Posted on January 3, 2013 at 4:20pm
we are screwed

better buy your wheelbarrows now so you can cart around your obamabills to buy a loaf of bread before the price of wheelbarrows gets too high

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- Cavallo
  Posted on January 3, 2013 at 4:25pm
  Especially if they go completely to coins.
  
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- KidCharlemagne
  Posted on January 3, 2013 at 4:52pm
  That’s not exactly true though……
  
  As long as new ‘money’ stays locked up in a bond, then it doesn’t circulate…….
  
  And when ‘money’ doesn’t circulate, then it isn’t out there trying to buy something (which boosts demand in excess of normal supply and consequently raising prices).
  
  If all those dollars ever got loose and started circulating, then it’s time to start thinking Zimbabwe or Weimar Republic….
  
  Report this comment

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