MORE Stimulus in 2013?

The Federal Reserve doesn't ever seem likely to stop its money-printing and bond-buying.

When it started up its $40 billion-a-month bond purchases in September, it dubbed the program “unlimited,” saying it would continue indefinitely until unemployment had recovered.

No indication on what constitutes “recovered.”

Of course, as it announced this, it was also in the midst of Operation Twist, a $45 billion-a-month long-term Treasury program that's set to expire this December. But don't hold your breath, because as always, the Fed maintains the ability to extend this.

The next Fed policy meeting is set to take place on December 11 and 12, and the long-term Treasury decision will be one of the first things on the table.

From the Wall Street Journal:

“A decision not to continue buying long-term Treasurys when Twist expires would be a surprise to markets and that would be counterproductive,” John Williams, president of the San Francisco Fed, said in an interview last week. “It would push long-term rates up and cause financial conditions to be a little less supportive of growth.”

Dennis Lockhart, president of the Atlanta Fed, has said that employment has still not shown the improvement the Fed is hoping to see, something Ben Bernanke has also expressed.

Unemployment was listed at 7.9% in October, higher than the previous month's 7.8% but down from the 8.1%-8.3% range that held steady through the first eight months of the year.

Before the recession, it was at a mid-4% range.

Since 2008, the Fed has bought back $900 billion in mortgage securities and over $1 trillion in long-term Treasurys through its stimulus programs.

But the more stimulus the Fed packs on, the more uncertainty it creates in the economy. Consumers and critics are beginning to fear inflation, which can be a result of the sort of money printing the Fed is doing to fund its bond-buying.

Ben Bernanke and the Fed, of course, have insisted that they can avoid inflation. But the indefinite timeline of the programs has made the markets tremble even more.

What the Fed really needs to do, many have argued, is set out specifics for its programs and increase communication with the general public.

Charles Evans of the Chicago Fed has suggested a good way to do this is to set out a minimum unemployment rate, such as 6.5%, and a maximum inflation rate, such as 2.5%, at which the bond-buying and depressed interest rates will stop.

Vice Chairwoman Janet Yellen has agreed with this kind of explicit strategy. A reduction in uncertainty would help the economy move forward and keep people from holding back on their investments out of fear.

Ben Bernanke will hold news conferences to outline central bank planning in both December and March. If the Fed is able to reach an agreement on how to communicate its strategies, it could be announced on one of these dates.