Lower mortgage/interest rates a la Operation Twist are no longer the answer. The ball is in the politicians' court.
"Economic growth so far this year has been considerably slower than the committee expected. Indicators suggest a deterioration in overall labor market conditions in recent months, and the unemployment rate has moved up. Household spending has flattened out... " -- FOMC
Let's review my thoughts regarding Operation Twist, the U.S. stock market's reaction yesterday and the German and Chinese economic news released last night (that seem to be the proximate cause for the schmeissing in S&P futures over night).
As I expressed in my FOMC Post Mortem, I still don't know why there will be any real benefit to the economy from this strategy, as the shape of the curve and the level of interest rates are not currently growth constraints.
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