San-Fran Fed's Williams Goes All-In Behind QE3

Before you go, we thought you'd like these...
Before you go close icon

John Williams, President and CEO of the Federal Reserve Bank of San Francisco, was speaking and presenting his case for the support of quantitative easing at the City Club of San Francisco. While the U.S. remains challenged, Williams believes (or stated) that our economy was on the mend even if the situation in Europe remains a huge drag.

Williams warned about the coming fiscal cliff. He said, "The drag on the economy coming from shrinking government employment and lower spending could turn dramatically worse at the beginning of 2013." The good news is that Williams said he does not expect that all spending cuts and all tax hikes will actually take place. On this he noted, "

For example, it's likely that the Bush tax cuts will be extended temporarily and that some spending cuts will be deferred.  Still, there's little doubt that a number of austerity measures will hit.  I expect that to slow our economy's forward progress."

Williams said he supports the new round of QE3 as the $40 billion purchases per month of mortgage-backed securities is in addition to the Fed's ongoing balance sheet expansion of longer-term Treasury securities at $45 billion per month.  He said, "In particular, we will continue buying mortgage-backed securities until the job market looks substantially healthier.  We said we might even expand our purchases to include other assets."

Today's news should not really be any surprise. Almost all voting and non-voting regional Fed presidents support the QE3 efforts.

FULL SPEECH

JON C. OGG


Filed under: 24/7 Wall St. Wire, Banking & Finance, Economy Tagged: featured
Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners

19 of the Creepiest, Most Inexplicable Things People Ever Experienced 19 of the Creepiest, Most Inexplicable Things People Ever Experienced
Man Built This Contraption In His Backyard - And Even He Was Surprised How Well It Worked Man Built This Contraption In His Backyard - And Even He Was Surprised How Well It Worked
This Elephant Was Separated From Her Mother As A Baby - But She's About To Get A Huge This Elephant Was Separated From Her Mother As A Baby - But She's About To Get A Huge