Fed launches QE3

FXStreet Team FXStreet

FXstreet.com (Córdoba) - As expected, the Federal Reserve announced on Thursday it will launch another round of quantitative easing, known as QE3, to support a stronger economic recovery.

"To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee agreed today to increase policy accommodation by purchasing additional agency mortgage-backed securities at a pace of $40 billion per month", the Fed announced.

The Fed will also continue with the Operation Twist program through the end of the year. "These actions, which together will increase the Committee's holdings of longer-term securities by about $85 billion each month through the end of the year, should put downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative", Fed says.

The Fed also decided today to keep the target range for the federal funds rate at 0 to 0.25% and currently anticipates that exceptionally low levels for the federal funds rate "are likely to be warranted at least through mid-2015", from previous pledge to keep rates down trough late-2014.

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FXStreet Team

FXStreet

Composed of a group of economic journalists and FX experts, the FXStreet content team produces and oversees all content published on FXStreet. It provides a purely journalistic approach to the Forex market.

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