Federal Reserve’s New Quantitative Easing: Why It Won’t Work

ATLANTA— The Federal Reserve announced yesterday that it will begin using proceeds from its maturing mortgage bonds to buy more government debt, thereby restarting on a smaller scale the quantitative easing policy the Federal Reserve had discontinued back in March.   The purpose of quantitative easing is to purchase debt in large volumes so as to lower, or ”ease,” long-term interest rates.   Low long-term interest rates are theoretically one of the best forms of stimulating capital investment and overall economic growth.  The question becomes, though, will it really work?  My uneducated guess is that it won’t in any measurable way this time around. Read more of this post