Is US central bank boss Ben Bernanke finally questioning the benefits of QE3?
That seems to be the message following the Fed’s decision overnight not to launch a third round of quantitative easing – dubbed QE3 – which would see it embarking on an aggressive bond-buying spree.
Instead, the Fed decided to continue with its much more modest “Operation Twist” program, under which it sells short-term bonds, and uses the proceeds to buy long-term bonds with the aim of pushing long-term interest rates lower. The original $400 billion “Operation Twist” program – which kicked off last September – had been due to expire at the end of this month. But last night’s decision means that the Fed will be busy “twisting” until the end of the year, buying $267 billion of long-term bonds (with maturities between six and 30 years) and selling bonds that mature in three years or less.
For the full story visit Business Spectator.
