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Explanation of Fed 600B QEII
November 3rd, 2010 11:03 PM

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 month
with total of 600B.

2Fed will hope to have higher stock prices, a little bit
higher inflation as well as higher household spending
and 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.


Posted in:General
Posted by Eric Fang on November 3rd, 2010 11:03 PMPost a Comment

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