Fed to launch QE3 of $40 billion MBS each month

 

qe31 Fed to launch QE3 of $40 billion MBS each month

WASHINGTON — By an 11-to-1 vote, the Federal Reserve on Thursday decided to launch a new program of open-ended bond purchases — so-called QE3 — saying it will buy $40 billion of agency mortgage-backed securities each month, starting Friday.

It’s also keeping in place so-called Operation Twist, which consists of swapping short-dated securities for longer-term securities, as well as reinvesting the proceeds of maturing securities, so the central bank will be adding $85 billion of long-term securities each month through the end of the year.
The Fed also extended its pledge to keep interest rates exceptionally low — Fed funds rates are currently targeted at a rate between 0% and 0.25% — from late 2014 to “at least through mid-2015.