The Fed Joins the Expansionist Choir

Good news come from both sides of the Atlantic! Last week it was Draghi announcing his open-ended debt-swaping operation to lower yields in Periphery debt, and today we have this from Bernanke:

"To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee agreed today to increase policy accommodation by purchasing additional agency mortgage-backed securities at a pace of $40 billion per month.  The Committee also will continue through the end of the year its program to extend the average maturity of its holdings of securities as announced in June, and it is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities.  These actions, which together will increase the Committee’s holdings of longer-term securities by about $85 billion each month through the end of the year, should put downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative."

It's still not a committment to target Nominal GDP, but at least we're seeing expansion where it counts, from the ECB and the Fed. Its a step in the right direction.