By Marshall Auerback
Last September, the Fed announced full speed ahead with its third round of quantitative easing, also known as QE3.
As the saying goes, three’s a charm, or so they hoped.
At the time, the Fed promised to buy $40 billion worth of mortgage backed securities every month through the end of the year and to keep what is essentially a zero interest policy in place through mid 2015. The Fed also announced that it would purchase other long-maturity assets to bring the total monthly acquisitions up to $85 billion, with the bias toward the long end expected to put downward pressure on long-term interest rates. The Fed made clear that QE3 is open-ended, to continue as long as necessary to stimulate to a robust economic recovery. Read more