Analysis: Fed's reinvestment merely will prevent unintended tightening

08/11/2010 | Barron's (free content)

The Federal Reserve's decision to reinvest funds from maturing bond holdings won't help the U.S. economy much, but it is a necessary step, according to Barron's. "What the Fed isn't doing is changing policy or monetizing the federal deficit," Randall W. Forsyth writes. "What it is doing is to prevent an inadvertent tightening of monetary policy that would have taken place had the central bank not taken steps to reinvest maturing securities."

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Barron's (free content)

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