Financing Has Never Been So Easy!

Notes on Fed Meeting 12.12.2012

• FED SAYS MONTHLY PURCHASES TO TOTAL $85 BLN
• LINKS INTEREST-RATE OUTLOOK TO INFLATION, UNEMPLOYMENT 
• ADOPTS ECONOMIC THRESHOLDS FOR POLICY TIGHTENING
• *FED TO KEEP BUYING MORTGAGE BONDS AT PACE OF $40 BLN PER MONTH    
• *FED BOOSTS QE WITH $45 BILLION IN MONTHLY TREASURY PURCHASES 
•  adds 5s to QE
• * DROPS 2015 DATE FROM STATEMENT....the linkage to economic variables substitutes for the calendar target so not quite a big deal.    
• *RATES TO STAY LOW WITH INFLATION SEEN AT 2.5% OR LESS, or 50 bp over target *>> and as longer-term inflation expectations remain well anchored.   
• * RATES TO STAY EXCEPTIONALLY LOW WITH JOBLESS ABOVE 6.5%         
• EXPECTS TO START TREASURY PURCHASES IN JANUARY    
• * FED LEAVES FEDERAL FUNDS RATE TARGET AT ZERO TO 0.25%    
• * FED SEES `SIGNIFICANT DOWNSIDE RISKS'    
• * LACKER DISSENTS FROM FOMC DECISION
• ** growth in business fixed-investment has slowed