Tuesday, April 26, 2011

QE2's Final Voyage

The Fed sought to raise asset prices
As a way to combat the debt crisis,
And so now we know
Half a trillion or so,
As a stimulus, more than suffices.  

Tomorrow the Fed will announce their follow-up course of action to the second round of quantitative easing, or QE2, which expires in June.  QE2, which comprised $600 billion of Treasury note purchases, was intended to stimulate the economy by increasing liquidity and lowering long-term rates, thereby goosing the appetite for riskier assets. This space is generally supportive of goosing, but notes the uncertain inflationary impact of QE2.

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