Yesterday the FOMC (Federal Open Market Committee) met to vote on moving more liquidity into the U.S. economy — $600 billion more. While our Fed News usually waits until Friday, I believe we will have plenty to talk about within the next couple weeks on the vote that holds more significance than any vote from Tuesday’s election.
The FOMC holds the “principal tool” for creating monetary policies. It’s comprised of twelve members — the seven members of the Board of Governors of the Federal Reserve System; the president of the Federal Reserve Bank of New York; and four of the remaining eleven Reserve Bank presidents (rotating a new set of four in every year). In essence, the FOMC makes the decision on how many treasury bonds they want to buy or sell. Yesterday when they met, the members of the committee were responsible for voting on the second round of quantitative easing as well as finding the amount of money they deemed appropriate to help the United States with unemployment and overall growth.
The FOMC, without Congressional involvement (…yet), took this vote. If you are curious about the privately held meeting within this private bank’s FOMC, here is a list prior to the vote signaling who and how each individual would vote for the move.
Hoenig has previously been expressed his dissent for QE2, however, you can see he is clearly out numbered. Tomorrow we will have more updates on the financial flood gates, when they will open, and if $600 billion will be where it will end. See you tomorrow!