banks with low interest rates
Instead of promising to keep rates at their low 0% to 0.25% level for an "extended period" as it has in its past several meetings, the FOMC said it would maintain those rates "at least through mid-2013."
However, Money Morning Contributing Editor Martin Hutchinson thinks that even this minimal action will do more harm than good.
"This is worse than QE3," Hutchinson said, referring to the potential for a third round of quantitative easing, in which the Fed has pumped trillions of dollars into the economy by purchasing Treasury bonds.
"What makes the Fed think it can forecast conditions two years in the future?" Hutchinson continued. "It has already been surprised on both growth and inflation just this year, since its January forecasts, which forecast 2011 growth of 3.4% to 3.9% and inflation of 1.3 to 1.7%. It's notable that three of the five regional Fed presidents - the guys actually in touch with the market - voted against."
Hutchinson has warned repeatedly that the Fed's policies have not only failed to jumpstart the economy, but have spurred inflation and helped keep unemployment high.
"This action has greatly increased the chances of the U.S. economy experiencing hyperinflation, on top of its other woes," Hutchinson said. "It does nothing for growth, the current problem."