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Risk and rewards in Fed’s plan

Perspective: A QE2 Q-and-A
Published on Oct 29, 2010

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by CareyBot

The Federal Reserve's formal QE2 announcement will arrive at 2:15 p.m. EST next Wednesday, the most-telegraphed punch in the history of punching.

Hence, a QE2 Q-and-A.

Monetary "easing" is a central bank's standard antidote to recession, tried and effective hundreds of times here and elsewhere. The central bank cuts its cost of money and "injects" reserves into banks by buying Treasurys from them with invented money. These operations ignite lending and borrowing, and we recover.

In this Great Recession, the Fed began to ease early, in 2007, and then massively post-Lehman, in September 2008.

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