BANKS TO BERNANKE: Farmland Looks Bubbly, QE3 Wasn't Warranted
REUTERS/Larry Downing
Via a Freedom of Information Act request, Bloomberg obtained the minutes to that meeting and has revealed some more information about what was said at the meeting in a new report.
According to the minutes, Bloomberg reporters Craig Torres and Joshua Zumbrun write that the TBAC opposed the Fed's third round of
The advisory council opposed continued Fed accommodation on Sept. 14, a day after the conclusion of the FOMC’s two-day meeting Sept. 12-13. The Fed after that gathering announced a third round of bond buying with purchases of $40 billion per month of mortgage-backed securities.
“Further accommodation is not warranted,” the bankers said, according to the minutes.
The advisory council warned of distorted bond prices resulting from the Fed’s purchases, limited impact on the economy, and “uncertain effects” from an eventual unwinding of the balance sheet, including “risks to price and financial stability.”
However, by the time of the meeting in February, the banks were on board with the program. Torres and Zumbrun say the minutes "trace how the 12 bankers’ views evolved from opposition to the Fed’s announcement of new bond buying in September to support for Fed efforts in February to boost an economic expansion beset by a 'drag' from fiscal tightening."
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