The Federal Reserve has chosen to lower its benchmark interest rates by another quarter point, to a 3.75% to 4% band. At the same time, it has decided to call a halt to their 3½-year campaign to shrink the Fed’s $6.6 trillion asset portfolio on December 1.

That’s two mistakes in the same meeting. With inflation near (albeit less near than in the last couple of months) the Fed’s goal of 2% inflation, it’s been past time to leave its benchmark alone and to let market forces handle inflation and interest rates. Past time, because the benchmark rate historically consistent with 2% inflation has been in the range of 4½% to 5%. The Fed needs to sit down and stop tweaking with the rates.

The other mistake is to stop unloading its far too bloated asset portfolio. The Fed currently holds $6.6 trillion in Treasury assets. That’s the Fed funding too much of Treasury borrowing. The market should handle that, not the government borrowing from itself via a purely on paper accounting trick.

It’s true that unloading those assets might—even likely would—put the short term credit market into a turmoil. That especially would upset the overnight and short-term repo markets that are important to businesses’ ability to make payroll or pay other bills in the gap between irregular receipts payable and the clockwork due dates of paychecks and bills. That turmoil would be short-lived, though, as the markets readjust to a market-driven debt facility. The volatility of the turmoil would be mitigated, too, were the Fed to unload its Treasury assets simply by not replacing them until they mature, and to limit itself thereafter to holding a relative few longer-term Treasury assets—10-year Notes and bonds.