Yellen says Fed could buy stocks if Congress authorized it

From ETF Daily News, Coronado, California
Thursday, September 29, 2016

For the first time the Federal Reserve has openly spoken about expanding its monetary policy toolbox to include the purchase of stocks -- not just bonds and mortgage securities -- and the implications could be huge.

Amid Fed chairperson Janet Yellen's testimony before the House Financial Services Committee yesterday, South Carolina Republican Mick Mulvaney asked very directly about the cartel's potential to buy stocks to prop up the economy. Mulvaney said:

"There's been some attention in the last few months about the recent decision by the Bank of Japan to start purchasing equities and my question to you is fairly simple. Is the United States Federal Reserve looking at the possibility of adding the purchase of equities to its tool box as it looks at monetary policy?"

Most Fed watchers would have expected Yellen to deflect the question, or to simply say no. But then Yellen dropped a bombshell with her response:

"The Federal Reserve is not permitted to purchase equities. We can only purchase U.S. treasuries and agency securities. I did mention in a speech in Jackson Hole, though, where I discussed longer-term issues and difficulties we could have in providing adequate monetary policy. Accommodation may be somewhere in the future, down the line that this is the kind of thing that Congress might consider, but if you were to do so, it's not something that the Federal Reserve is asking for." ...

... For the remainder of the report:

http://etfdailynews.com/2016/09/29/janet-yellen-says-the-fed-will-buy-st...