Bernanke took lead in negotiating QE3

TRD New York /
Sep.September 28, 2012 09:00 AM

In the weeks preceding the Federal Reserve’s September meeting, Chairman Ben Bernanke persistently negotiated one of the bank’s most ambitious stimulus plans.

“This is a ‘Main Street’ policy,” Bernanke said following the two-day meeting where the bank agreed to purchase $40 billion in mortgage bonds every month until unemployment improves. “What we are about here is trying to get jobs going.”

In buying mortgage-backed bonds, the Fed hopes to push down long-term interest rates and buoy the value of homes.

Bernanke hopes the plan will boost the economy as households and businesses spend, invest, and hire more as their assets improve. The plan proved initially successful yesterday when mortgage rates fell to a record low.

In the months preceding the meeting, Bernanke negotiated the board’s support of the move in advance of the vote — an exception to the rule in today’s gridlocked political system. According to the Wall Street Journal report, he did so through constant conversation and debate, often catching board members off-guard by calling them on weekends. Bernanke identified a handful of fence-sitters and doggedly worked and compromised with them for their support. [WSJ] — Jane C. Timm


Related Articles

arrow_forward_ios
Paul Volcker (Credit: Getty Images)

Paul Volcker, Fed Chair who infuriated real estate, dies

Jerome Powell and New York City construction in October 2019 (Credit: Getty Images)

The Fed lowers rates, and once again real estate is loving it

Housing and Urban Development Secretary Ben Carson (Credit: Getty Images, iStock)

HUD wants to jumpstart bank lending on low-income homes

Lenders issued the most mortgages in 14 years last quarter (Credit: iStock)

Nonbank lenders could give serious boost to cooling housing market

The number of closed sales fell by more than 14 percent year over year in the third quarter (Credit: iStock)

Low mortgage rates are killing Manhattan’s all-cash buyer

Federal Reserve Chairman Jerome Powell (Credit: Getty Images)

Fed cuts rates, signaling caution ahead for real estate investors

Here’s what a Fed rate cut would mean to the US housing market

Here’s what a Fed rate cut would mean to the US housing market

(Credit: iStock)

Despite housing market slowdown, mortgage lenders just had a great second quarter

arrow_forward_ios
Loading...