What's the Fed's Next Move to Recovery
It is likely that Fed is going to buy more treasury bonds in order to stimulate the economy further. This move is considered risky since it may cause more future inflation that would be acceptable. The idea is that buying treasury bonds will lead to lower interest rates and further give incentives to banks to loan money to potential borrowers. The borrowers would then be able to refinance their mortgages and increase their disposable income. An increase in disposable income would lead to more purchases and move the country to a quicker recovery. The move would also motivate businesses to expand with lower monetary costs, and thus hire more employees. Although the article cites a relatively low number in jobs created by this move, the Fed seems to be willingly to take the risk, rather than slip back into a deeper recession.