Taking a Look at Quantitative Easing

724 WordsFeb 2, 20183 Pages
Globally financial crisis which lasted from 2008 until now has pushed the U.S. economy falling into prolonged inactivity, caused the U.S. Federal Reserve (FED) to consecutive lower interest rate to lowest record 0 - 0.25 % and continuous launching QE packs huge "rescue” the economy . In November 2008, the U.S. government has launched QE1 (Quantitative Easing) package when the financial crisis was in the most traumatic period. The Fed has cut interest rates for the USD to 0 - 0.25 % and paid out approximately 1,700 billion to buy debt securities collateral guarantees and Treasury bonds to increase the economy. In the impact of QE1, the U.S. economy has recovered in a short time but then there were some signs of decline. Therefore, from November 30, 2010 through December 6, 2011, the Federal Reserve decided to start QE2 program with adding $600 billion to purchase government bonds. To "save " and should continue to motivate the U.S. economy , the Fed has applied the program " Operation Twist " , also known as QE 2.5 , which contained two packages worth $400 billion and $267 billion . Thus, unlike conservative QE, the Fed programs do not increase the money supply and expand the balance sheet of its assets, but only change the composition of the balance sheet using the available funds. However, after QE1 and QE2 package, the U.S. economy still did not have many positive signs. The U.S. government chose to launch QE3 in 9/ 2012 and initiated to keep short -term interest rates
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