Fed: ZIRP for at Least Another 18 Months

FOMC is out with a policy statement today, link here.

"The Committee also decided to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013."

Over to you, Congress? Can we get some permanent fiscal stimulus? The Fed has to believe that they have done all that they can with monetary policy at this point (even though they do not realize that monetary policy actually works in reverse of what they believe).

At this point, the best thing the Fed could do is to point out to Congress the current impotency of monetary policy and goad Congress into getting involved via fiscal policy, deficit be damned.