Wednesday, 03 November 2010 15:34

Federal Reserve Stimulating US Economy By 600B

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The Federal Reserve is trying to stimulate the economy one day after the nation rejected many of the bailout programs over the past two years.  The Reserve has announced it will buy hundreds of billions more in Treasury bonds.

The Fed says it will buy $600 billion of long-term government bonds by the middle of 2011.  In doing so, the Fed hopes to reduce rates on mortgages and other debt. Also, those purchases will be in addition to an expected $250 billion to $300 billion in purchases  from reinvesting proceeds from its mortgage portfolio.

Critics claim the interest rates are now very low and that the actions will increase inflation.

What do you think?

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