Details are still emerging, but as expected the Federal Reserve will launch another round of bond-buying to boost the sluggish U.S. economy. Whether the Fed’s actions technically qualify as “QE3” – or a third round of quantitative easing – is subject to debate.
Here’s what we know so far:
- The Fed will buy $40 billion of mortgage debt per month until America’s financial outlook improves.
- The Fed will keep interest rates near zero through at least mid-2015. Prior to today, it had vowed to keep interest rates that low only through late 2014.
- Eleven of the 12 members of the Federal Open Market Committee members supported the bond-buying decision.
- The committee vowed to “undertake additional asset purchases, and employ its other policy tools” if the labor market does not improve substantially as a result of the latest bond-buying program.
- Stocks climbed close to 1% in the 30 minutes after the bond-buying program was announced. The Nasdaq led the way, gaining 93% as of 1:09 p.m. eastern.
I’ll have more information on today’s Fed announcement after Ben Bernanke speaks later this afternoon. Stay tuned.