Lowering short-term interest rates is the Federal Reserve's main way to get banks to increase lending.
VOA: special.2010.11.05
The American Bankers Association scored a victory today when the Federal Reserve agreed to increase the amount banks can collect from merchants each time a consumer swipes his debit card from its original proposal.
The market is pegging 30-year inflation at a slightly higher 2.0 percent rate, which is the spread between long-term 30-year Treasury nominal bonds and 30-year TIPS. Federal Reserve policy to increase the money supply has not led to inflation during this recovery because the demand for money has been lower than in other recoveries when inflation did occur.