short-term interest rates already about as low as they can go, the FOMC agreed to deliver that
support by purchasing additional longer-term securities, as it did in 2008 and 2009.
thats because the banks received there TARP money and they are sitting on it. They are to scared to start loaning money to anyone.Our earlier use of this policy approach had little effect on the amount of currency in
circulation or on other broad measures of the money supply, such as bank deposits. Nor did it
result in higher inflation.
Two years ago the banks couldn't wait to give people loans to conduct business. I personally know one guy that is $300,000 in debt.(don't worry, 300G's to this guy is pocket change) The banks couldn't wait to give this guy more money, He had to write a formal letter to (several) banks and ask them to stop sending him requests for loans.
Today that same guy, even with a A++ credit rating got refused a loan to expand his business
To say the least the guy was shocked. But it illustrates the problem with the current economic situation.
Nothing is going to improve until the banks start releasing the funds they are sitting on