11.03.10

QE2 Is Here

Posted in Economics, Financial Markets, Politics and Policy at 2:28 pm

FOMC Press Release:

http://www.federalreserve.gov/newsevents/press/monetary/20101103a.htm

To promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to expand its holdings of securities. The Committee will maintain its existing policy of reinvesting principal payments from its securities holdings. In addition, the Committee intends to purchase a further $600 billion of longer-term Treasury securities by the end of the second quarter of 2011, a pace of about $75 billion per month. The Committee will regularly review the pace of its securities purchases and the overall size of the asset-purchase program in light of incoming information and will adjust the program as needed to best foster maximum employment and price stability.

$600 billion in longer-term Treasuries at a rate of around $75 billion per month.  This is roughly in line with expectations (consensus was for $500 billion – $1 trillion, at a rate of around $100 billion per month), though it’s at the lower end of the range.  Also, there had been talk about the Fed potentially purchasing MBS and other assets in addition to or instead of Treasuries and that did not materialize.

I’ll post more later.

RSS feed for comments on this post · TrackBack URL

Leave a Comment