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See What People Are Saying About... Fed Making Troubles Worse

Friday, 20 Mar 2009 | 12:03 PM ET

Across Wall Street some investors are starting to wonder if the Fed will actually make the nation’s economic troubles worse in the long run.

As you likely know, the Federal Reserve said on Wednesday it would buy up to $300 billion in longer-term Treasuries – a move that should bring down mortgage rates and in turn spark home buying or refinancing. (30-year notes are loosely tied to mortgage rates.)

However, not all analysts agree the plan is a good idea or that it will cure our economic ills. They argue that it remains to be seen whether credit easing will help an economy suffering from the effects of rampant over borrowing.

And, they say the Federal Reserve will eventually face a day of reckoning with inflation. According to Marty Mitchell head of government bond trading at Stifel Nicolaus inflation will become a big issue. "Inflation is tomorrow's end game," he says.

However, the Fed plan certainly does have its advocates. On last night’s Fast Money Rebecca Patterson, head of global foreign exchange and commodities at JPMorgan Private Bank made the case that inflation would be a good thing – at least for the dollar.

It’s counter-intuitive but she argued the relationship between the dollar and inflation is often positive! (Click here to see our full interview with Patterson!)

And that leads to our Fast Money Reader Poll. Do you think potential short term gains from the Fed plan outweigh most long term challenges?



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