http://www.minyanville.com/articles/bernanke-fed-fomc-obama/index/a/26540
I saw the other day that the FED made 45 billion dollars for us.
The question is how much more would it actually have been if they had charged to lend?
And WHY aren't they doing it now after a year and a half.
How long is to long to let a bad thing go on?
The only meaningful policy consideration occurring at this meeting is the move to supplant the targeting of the Federal Funds rate (the rate at which banks borrow from one another overnight) with the interest rate paid on excess reserves.
Going back more than a year and a half, to the unfolding of the Lehman Brothers collapse, the Federal Reserve essentially lost control of the Fed Funds rate. It is still unable to bring it in, and so when the decision is eventually made to tighten monetary policy -- a decision I believe will come far later than they currently think -- there's a risk that the Fed Funds rate will not respond to a new, higher target, damaging what little credibility the central bank has left.
