September 21, 2011 - Fed Announces Sales Program of Bonds

The Fed has announced (225p today) a $400 billion sales program of short term bonds (2 year) and a purchase (with sale proceeds) of an equal amount of longer term (10 bonds) bonds (now yielding 1.56%) - 3.25% for 30 year bonds. It is uncertain this program will reduce interest rates and spur investors to migrate toward more risky (higher yield) investments; short term U.S. bond rates remain at near zero as a result of the policy and the U.S. Capital markets. Further, three Fed governors voted against the program decision. The U.S. Dollar has depreciated dramatically over the past 18 months, compared to other countries' currencies.

Timothy Speiss is the Partner-in-Charge of EisnerAmper's Personal Wealth Advisors Group and Vice President of EisnerAmper Wealth Planning LLC. He chairs our Asia Practice and is a member of the firm’s community service group, EisnerAmper Cares.

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