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dpdoor (29.16)

August 2012

Recs

2

Fed Muni Bonds

August 19, 2012 – Comments (0)

It seems that the next fed move would be to buy municipal bonds. The largest employer in many cities is the local government itself. Many cities are in drier straits and several have recently filed for bankruptcy protection. I am not very familiar with bonds but it seems that the interest payments on bonds is a stress on city and state governments. If the fed were to buy these bonds they could lower the interest rates on the bonds lowering the local governments expenses. The bonds are earmarked for projects, not for hiring civil servants or government employees, but lowering the interest rates lowers the expenses and gives more money to use elsewhere.  [more]

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