Vladimír Urbánek (Kurzy.cz)
Markets  |  March 11, 2013 11:54:48

Bernanke: Fed would not have to sell assets gathered, let them expirovat


The head of the Fed at the end of last month planted the seed speculation on the fate of accumulated assets in the balance of the central bank when I suggested that one of the ways to circumvent the potential negative effects associated with the future sale of these assets is the ability to sell assets and hold them until maturity. Such a procedure should prevent the subsequent rise in interest rates, while losses not realized that the growth rates and the Fed's asset sale incurred.

Bernanke to terminate the asset purchase program and therefore exit the disposal / sale of accumulated assets, among other things, that the Fed in this way can count on the first stop of the reinvestment of issued securities, further revisions may follow his own vision for the evolution rates, an increase in base rates and finally comes to the word of assets held for sale in the next 3-5 years.Bernanke pointed to the last point, that some assets would leave the Fed could be even longer until their expiration.

Total Fed's balance sheet has grown over time from the start of the programs of quantitative easing (QE) to more than 3 trillion and continues to grow every month for about 85 mld.USD agreed in the third round of purchases.

Assessing the situation is complicated because of the de facto situation in history has never and nowhere been made and it is very difficult to correctly predict all the consequences of such action. The only country that has long-term experience with the purchase of assets such as stimulus measures in Japan and it's not too good experience, because the land of the rising sun in the pacing mode remains until today.
According to some comments is the ability to hold the assets accumulated until their expiration Spice hypothetical or theoretical possibility, which in reality will be basically impossible.

End of U.S. QE is associated with the achievement of unemployment at 6.5% if inflation at the same time will not exceed 2.5%.

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Bernanke: Fed by nemusel prodávat nashromážděná aktiva, nechal by je expirovat

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