20 Jan 2012

Fed Expected to Enact $1-Trillion-Worth of Easing

In order to stimulate our economy, it sounds like the Fed plans to pump-it-up with a $1 trillion easing project.

And it could happen as early as this month...

CNBC reports:

"There seems little point in waiting to implement further easing, and to do so could confuse the message the Fed is trying to deliver at a point in time when it is trying to make its communication with the public clearer," he said.

Next week, the Fed's Open Market Committee will meet to discuss matters further. Meanwhile “expectations are rising that the languishing housing market will drive the central bank to buy up mortgage-backed securities.”

The aim of those purchases will be to push interest rates even further and to indirectly induce confidence that there are more “monetary tools” that can revive the economy.

Some experts hope that the announced will get stock prices rising again; similar to what happened in November 2010 when the Fed's most recent balance sheet expansion began.

Overall, experts think the easing is the only option remaining in order to effectively "trick" Americans into obtaining a sense of optimism again, viewing the recent stock market rebound as being “temporary” at best.

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