Translation

News. Aug. 12 (Bloomberg) -- The Federal Reserve plans to slow the pace of its purchases of U.S. Treasuries as the recession eases, and signaled that the $300 billion program will end in October.

“To promote a smooth transition in markets as these purchases of Treasury securities are completed, the Committee has decided to gradually slow the pace of these transactions and anticipates that the full amount will be purchased by the end of October,” the Fed’s Open Market Committee said in a statement in Washington. The program was previously scheduled to end in September.

Translation.

!. The banks have too much money in the vaults.
2. The yield curve is so steep banks can make all the money they want.
3. Financial risk is low and the markets have stabilized.
4. We will keep monetizing the debt.
4. The money supply is likely to slow down.
5. Hopefully the banks will deploy the enormous reserves at the Fed.
6. High-grade bond prices are not likely to perform as well as they did in the past several months.

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