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While Congress Stonewalls, Fed Hatches New Scheme To Save Economy

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A bizarre situation has developed in Washington.

The Federal Reserve, which has tried everything it can think of over the past two years to resuscitate the economy, is now reportedly telling Congress behind closed doors that it has done all it can and that it's Congress's turn to do something.

Congress, meanwhile, appears intent on not doing anything: Yesterday, the Senate quickly voted down President Obama's jobs bill, which would have been killed in the House.

And then, suddenly, just when it seemed like no one was going to do anything, the Wall Street Journal reported that the Fed is now considering launching a new round of "quantitative easing" designed to bring down mortgage rates, thus making it cheaper to buy and own houses.

The market loves that idea, and stocks rose to start the day on Friday.

So what's really going on in Washington? Is Congress going to stonewall every attempt to save the economy? Will the Fed's new scheme finally work? Or will we just keep on muddling through?

In the accompanying video, I discussed the situation with Joe Weisenthal, Deputy Editor at Business Insider.

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