Why were Republicans against fed's selling short term and buying long term?

OohPooPahDoo

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The Fed selling short term debt and buying long term

a) results in no net change to their balance sheet (if the same amount of each is transacted)
b) raises the incomes of people in retirement or near retirement, who presently are seeing barely more than a 1% return on their money investments. This will enable more people near retirement to actually retire - thus freeing jobs for younger people - and it will help keep those presently in retirement from having to return to the workforce
c) lowering the long term rates makes it cheaper for people to buy houses and to invest in new businesses

Why would anyone be against that?
 

Charles_Main

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The Fed selling short term debt and buying long term

a) results in no net change to their balance sheet (if the same amount of each is transacted)
b) raises the incomes of people in retirement or near retirement, who presently are seeing barely more than a 1% return on their money investments. This will enable more people near retirement to actually retire - thus freeing jobs for younger people - and it will help keep those presently in retirement from having to return to the workforce
c) lowering the long term rates makes it cheaper for people to buy houses and to invest in new businesses

Why would anyone be against that?
Nothing is ever as simple as it seems.

The housing bubble that burst was made that way by artificially keeping interest rates low. What happens when millions of people buy a home because the rates are low, and then they go back up?

The same thing that just happened in 08. People's payments go so high they can not longer afford the home.

I am sorry but if you can not afford your mortgage payment when interest rates are high, you should not be given the loan just because you can afford it when they are low. It's asking for disaster. The Highest average rate in the last 30 years or so, should be used as a base line to determine if someone will be able to make the payments. Not the lowest interest rate in Decades.
 
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hortysir

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The Fed selling short term debt and buying long term

a) results in no net change to their balance sheet (if the same amount of each is transacted)
b) raises the incomes of people in retirement or near retirement, who presently are seeing barely more than a 1% return on their money investments. This will enable more people near retirement to actually retire - thus freeing jobs for younger people - and it will help keep those presently in retirement from having to return to the workforce
c) lowering the long term rates makes it cheaper for people to buy houses and to invest in new businesses

Why would anyone be against that?
Who says they are/were?

Links?
 

eflatminor

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Why would anyone be against that?
Can't speak for Republicans in general but I'm against this action from the Fed because I do not believe central price controls work, ever. If you think the government should control the price of money (the interest rate), why not beer...or televisions...or orange juice?
 

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