No real surprises, aside from the 3 dissents.
- The Federal Reserve will use more than $400 billion to try to drive down long-term interest rates, make home loans cheaper and invigorate the economy
- The Fed announced Wednesday that it will do so by adjusting the makeup of its existing holdings. It will sell $400 billion of its shorter-term Treasurys to buy longer-term Treasurys. And it will reinvest principal payments from its mortgage-backed securities, to help keep mortgage rates at super-low levels.
- Three members dissented from the decision.
- With its mortgage-backed securities, the Fed had previously reinvested principal payments into Treasury purchases.
- In its statement, the Fed noted that the economy is growing slowly, unemployment is high and housing remains in a prolonged slump.
Let the countdown begin for QE3