So here we are, QE3. Many of us watching this slow motion train wreck have been wondering when this big milestone would be reached.
“To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee agreed today to increase policy accommodation by purchasing additional agency mortgage-backed securities at a pace of $40bn per month.” – Fed launches QE3: the full statement – Telegraph.
I’m a bit surprised that the freshly printed money is being used to buy mortgage-backed securities. Tossing more money at these derivatives just seems like throwing gasoline on a fire to me – a very bad sign me thinks.
By the way, I really love this photo of Bernanke! It really shows his mad-scientist side well.