The third phase of quantitative easing (QE3) has been the main economic issue in recent days. The fact is that this is a broad program in which the Federal Reserve System (FRS) buys US debt bonds in large quantities. Now many market analysts are wondering whether the Fed will release QE3 before the end of the year or not.
At the meeting, which took place on Friday, August 26 in Jackson Hole, Bernanke made no statement in this regard, saying only that “the Fed is thinking of using other stimuli for the U.S. economy, without explaining exactly what it means.”
Most interestingly, exactly one year ago Ben Bernanke said the Fed would not start the second phase of quantitative easing (QE2). But three months later, on November 3, 2010, the second phase of quantitative easing (QE2) began. The purpose of this program was simple: the Fed had to buy U.S. government debt obligations to lower interest rates on U.S. Treasury payment orders, which was, in the first place, to encourage investors to withdraw money. of low-income payment orders. of the Treasury and, secondly, invest this money in riskier but more profitable markets.
This program worked, but not as well as we would have liked. From November 2010 to June 2011, the Dow Jones was up 16%, the S&P was up 14% and the Nasdaq was up 15%.