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The Federal Reserve System (The Fed) will hold the Interest Rate Conference Market Focus QE3

2012.04.24 Wan-Ling Chou

The Fed is expected to end 400 billion US dollars of short-term debt for long-term debt measures in June. Vice President, Yelun Hsi thinks that reversal of the end of the operation does not mean that monetary policy will be tightening, in addition, that there is no need to operate additional stimulus measures to reverse the impact of desalination operations. By reversing the operation, the Fed adjusted the long-term debt and short-term debt combination in its hands.

By selling short-term bonds and buying long-term bonds, the Fed lowered interest rates on long-term bonds and stimulated the economy. This would not make the Fed balance sheet to continue to expand, but also to avoid inflation warming, the disadvantage is the future exit more difficult. At present, Ye-Lun and the New York Federal Reserve Bank President, Dreyer, are revealed that the Fed does not intend to implement QE3 at this month's conversation. The Fed will meet on the 24th and 25th, and will also update the quarterly economic forecast. It is expected that the focus of the market will focus on economic forecast changes. Investor recognition will likely affect the next action of the Fed.