The Federal Reserve today declared war on the bond vigilantes who have been pushing long-term interest rates higher in fear of the potential for inflation and the possibility of the U.S. government defaulting on its debt. These two following quotes are verbatim from the Fed's FOMC statement released today:"The Committee also is prepared to purchase longer-term Treasury securities if evolving circumstances indicate that such transactions would be particularly effective in improving conditions in private credit markets."
The Fed also indicated that it is going to begin to "facilitate" loans to households and businesses. Why do I doubt this?
"The Federal Reserve will be implementing the Term Asset-Backed Securities Loan Facility to facilitate the extension of credit to households and small businesses."
