links for 2010-11-07

While they have been used successfully in the United States and elsewhere, purchases of longer-term securities are a less familiar monetary policy tool than cutting short-term interest rates. That is one reason the FOMC has been cautious, balancing the costs and benefits before acting. We will review the purchase program regularly to ensure it is working as intended and to assess whether adjustments are needed as economic conditions change.

Although asset purchases are relatively unfamiliar as a tool of monetary policy, some concerns about this approach are overstated.

Federal Reserve Chairman Ben S. Bernanke invoked the inflation-fighting legacy of the late Nobel laureate economist Milton Friedman and, for the third time in as many days, defended the Fed’s expansion of record stimulus.