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September 2012

Recs

2

More QE and low interest rates

September 18, 2012 – Comments (0)

Last week the Fed announced its plan to implement QE 3, yet another round of significant mortgage and treasury bond purchasing (approximately $40B/mo in mortgages and $40-45B/mo of treasuries).  Do the quick math and that is no less than $960B of asset purchases over the next year.  The effect of this purchasing will be to remove high priced, low-yielding bonds from the books of many large, institutional investors (think banks, pension funds, and the like) and increase the money supply.    [more]

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