Whether you are for stimulus action or against it, one thing is sure ”“ you are getting more.
The Federal Reserve is undertaking a third round of “quantitative easing,” or QE3 as the market has dubbed it, in an effort to pump more money into the economy and embolden expansion.
In an open letter, the Federal Open Market Committee said economic activity has continued to expand at a moderate pace in recent months, and that growth in employment and business capital spending has been slow.
“Without further policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions,” the committee stated. “Furthermore, strains in global financial markets continue to pose significant downside risks to the economic outlook.”
The Fed will expand its purchase of mortgage-backed securities by $40 billion monthly, and possibly undertake other actions if employment does not pick up in coming months.
