Fed to inject $600b in U.S. economy - Macleans.ca

Fed to inject $600b in U.S. economy

Critics say last-ditch effort could drive dollar down further


The Federal Reserve said it will inject another $600bn into the struggling U.S. economy in a new effort to shore up the country’s economic growth.  The quantitative easing operation, nicknamed ‘QE2,’ will see the Fed buy longer-term Treasury securities and is being regarded as “one of the most significant decisions the Fed has made in years,” according to the Financial Times. The measure is meant to drive down long-term investment rates and could be one of the last options available to the Fed to try to stimulate the economy through monetary policy, since short-term interest rates in the U.S. are already hovering around zero. Some economists, though, fear the intervention could cause the dollar to drop further on international markets.

Financial Times

Filed under: