Despite swirling rumors that they’ll do otherwise, the Federal Reserve is not going to apply the brakes on the government’s $85-billion a month treasury and mortgage bond buying program known as “quantitative easing.”
The Fed announced its first round of quantitative easing in November 2008 and renewed it in June 2010. This current round of quantitative easing, known as QE3, started in September 2012. Quantitative easing is an unusual tool for central banks to lower interest rates and stimulate lending.
Stock markets in the US and abroad have been expecting the Fed to act differently. How is today’s announcement going to impact the markets?
Joseph Brusuelas, Senior Economist at Bloomberg Industries