Below are some thoughts on the Federal Reserves’s "Quantitative Easing 2" plan (or QE2): the reasoning, size, objective and outcome. Please understand that my comments are conjecture, and do not represent inside information or unique thinking. I have had a lot of conversations with economists and Wall Street players, and while there is a uniform belief as to the rationale behind easing, there is no consensus as to the size or outcome.
I expect "Quantitative Easing 2" (or QE2) will be implemented on a "stepped in" basis: perhaps $300 billion to $500 billion initially, followed by additional commitments as necessary. The impact will be meaningful for residential real estate, with at least a stabilization of prices through a rate-induced increase in demand (4 percent or lower 30-year-fixed mortgage rates).