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The central bank has made borrowing cheaper for businesses and consumers by purchasing more than $2 trillion of government debt and mortgage-backed securities.
Determined to combat an extraordinary series of economic shocks -- a recession, the collapse of the stock-market bubble, the terrorist attacks of Sept. 11, 2001, a flood of corporate accounting scandals and the war in Iraq -- the Fed has made the cost of borrowing cheaper for a longer time than at almost any point in history.
Is the cost of borrowing cheaper at JPM than it is at community banks?
Global uncertainty typically prompts international buyers to buy U.S. bonds, which pushes down mortgage rates and makes borrowing cheaper – though with some foreign markets concerned about Trump, some investors might leave the U.S. bond market.
By making borrowing cheaper, the Fed hopes to help the modest housing recovery.
It meets again at the end of October to decide whether to make borrowing cheaper and, perhaps, stoke spending.
Similar(42)
Further downgrades by credit ratings agencies would mean Greek government bonds would no longer be eligible as collateral in borrowing cheap E.C.B. funds, starting in 2011.
The Fed has held short-term interest rates near zero since December 2008 to make borrowing cheap and ease the recovery from the financial crisis.
Banks have flocked to "surf the curve", borrowing cheap, short-term funds and investing them in higher-yielding, longer-dated assets.
A hefty tax cut, a public-spending splurge, a declining dollar, consumers borrowing cheap money like crazy: all have played a part.
With interest rates at record lows, the states that needed aid had more options for borrowing cheap capital, often without paternalistic ethical dictates.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com