The US Federal Reserve has launched an open-ended effort to spark recovery by injecting an extra $40bn into the economy each month through purchases of mortgage-backed securities.
Unlike previous programmes, the Fed’s third round of quantitative easing – nicknamed QE3 – does not have a defined limit and will continue until the labour market improves.
Combined with its purchases of long-dated Treasuries under the Operation Twist programme, the Fed will be buying assets at a pace of $85bn a month for the rest of the year, similar to its QE2 programme during 2010.
