"The Fed Has Changed Enormously in the Past Nine Months!"

The FED used to manage monetary policy, and that was about all. Today it’s engaged in fiscal actions that have to do with the government’s debts.

Michael S. Rozeff, LewRockwell.com: The two main ones are that it is buying $300 billion of U.S. Treasuries and it is buying $1.25 trillion of mortgage-backed and agency debts.

The FED traditionally bought U.S. debt, but never in such volume. The government deficits are so large that the FED will probably eventually announce one or more new programs to buy U.S. debt. At a minimum, these deficits ensure that the FED will not be soon selling what it now is in the midst of buying. No exit here.

The FED never bought mortgage-backed securities as part of its permanent portfolio. Now it is. It is buying these securities from housing-related government-sponsored enterprises (GSEs) such as Fannie Mae, Freddie Mac, and the Federal Home Loan Banks.