Is the Fed keeping rates down?

It just seems odd that short term treasury bills on the fed portfolio are strangely small, and have gotten miniscule since the crash. So how much is the Fed responsible for keeping short term rates down? I dunno, ask an expert. But there are reasons to believe the economy is crap and rates are low, even without the Fed's help.





Fisher seems to be the resident expert. He says:

"My sense is that ending our large-scale asset purchases this fall will not be enough. The FOMC should consider tapering the reinvestment of maturing securities and begin incrementally shrinking the Fed's balance sheet. Some might worry that paring the Fed's reinvestment in mortgage-backed securities might hurt the housing market. But I believe the demand for housing is sufficiently robust to continue improving despite a small rise in mortgage rates."

"Those of us who are the current trustees of the Fed's reputation—the FOMC—must be especially careful that nothing we do appears to be politically motivated."

He is essentially saying the Fed should get out of the DC bailout business. That means replace DC as I cannot imagine how a bunch of delusional swamplanders can do anything coherent. 


What does Krugman say:

Instead, we should wait until there’s really clear evidence of overheating in the form of sharply rising prices. The risks of moving too soon versus too late are not symmetric.

Wait for inflation? If we see a sharp rise in inflation, we can be sure that DC has started another recession.