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Quantitative easing (QE) is a monetary policy action where a central bank purchases predetermined amounts of government bonds or other financial assets in order to stimulate economic activity. [1] Quantitative easing is a novel form of monetary policy that came into wide application after the 2007–2008 financial crisis.
The Federal Open Market Committee voted to expand its quantitative easing program further on December 12, 2012. This round continued to authorize up to $40 billion worth of agency mortgage-backed securities per month and added $45 billion worth of longer-term Treasury securities. [13]
Key takeaways. The Federal Reserve uses its balance sheet during severe recessions to influence the longer-term interest rates it doesn’t directly control, such as the 10-year Treasury yield ...
The term "Greenspan put" is a play on the term put option, which is a financial instrument that creates a contractual obligation giving its holder the right to sell an asset at a particular price to a counterparty, regardless of the prevailing market price of the asset, thus providing a measure of insurance to the holder of the put against falls in the price of the asset.
In business and economic circles, quantitative easing is all the buzz these days. And the Federal Reserve just announced we'd get another round.
On this day in economic and financial history... On Nov. 25, 2008, in the depths of a once-in-a-lifetime financial crisis, the U.S. Federal Reserve, in partnership with the Treasury Department ...
It generally means buying bonds at a slower rate than would occur under a Quantitative Easing policy. It affects long term interest rates, whereas QE is more impactful on shorter term interest rates. Where QE focuses on quantities of bonds, YCC is concerned with the price.
The term first appeared in 2014, during the chair of Janet Yellen, and reflected her strategy of applying prolonged monetary looseness (e.g. the Yellen put of continual low-interest rates and direct quantitative easing), as a method of boosting near-term economic growth via asset price inflation (a part of modern monetary theory (MMT) [a]).