"The Fed spends $85 billion a month
purchasing Treasury bonds and mortgage-backed securities.
That’s the amount of the entire sequester for fiscal year 2013."
MarketWatch interviewed Allan Meltzer, author of a three-volume history of the Federal Reserve.
At 85, Meltzer’s mind is ever-brilliant, but his mood was cloudy. “We’re in the biggest mess we’ve been in since the 1930s,” he told me. “We’ve never had a more problematic future.”
Governments by nature are more concerned about what happens today than what happens in the future, Meltzer told me. So there is little pressure on the Fed to unwind its positions and raise rates. Former Treasury Secretary Timothy Geithner believed in taking care of today’s problems today, and letting tomorrow take care of itself. The Fed suffers from the same myopia.