November 3rd, 2010 11:03 PM by Eric Fang
Please refer to today's WSJ article Fed Fires $600 Billion Stimulus Shot.
Here is the summary:1)Fed plans to purchase 50B of bonds for 8 monthwith total of 600B.
2Fed will hope to have higher stock prices, a little bithigher inflation as well as higher household spendingand coporate growth with the help of weak dollar.
3)Oil, Commodities, Gold, etc will expected to move higher.
4)This purchase is equilent of cutting the fed rate of 0.75%.
5)This QEII may push the rate 0.25% lower(still within the range).
6)There are some risks if this does not work.