Friday, September 14, 2012

US Fed's QE3 may fail to boost anemic economic growth

WASHINGTON, Sept. 13 (Xinhua) -- The U.S. Federal Reserve on Thursday announced a new round of bond buying program and extending the duration of its ultra-low interest rate, but many economists believed that those moves might fail to deliver the target of bolstering the country's weak economic recovery.

OPEN-ENDED QE3

After a two-day policy meeting of the Federal Open Market Committee (FOMC), the Fed's powerful interest rate setting panel, the U.S. central bank unveiled an open-ended bond-buying plan -- to purchase agency mortgage-backed securities (MBS) at a pace of 40 billion U.S. dollars per month to speed up the recovery of the nation's housing sector.

This was the third round of quantitative easing, also known as the QE3, which the Fed has introduced since the onset of the global financial crisis in 2008.

U.S. economic activity has continued to expand at a "moderate pace." Growth in employment has been slow, and the jobless rate remained elevated, the Fed said in a statement explaining its motivations of the new unconventional monetary policy. Read More