I heard it first on CNBC. Then again on the nightly news and saw it in the newspaper: QE3. The next Queen of England perhaps, or maybe a sister ship for the QE2?
Wrong. QE 1, 2, and 3 refer to something called quantitative easing. It’s what the Federal Reserve (the country’s central bank) can do when it wants to stimulate the economy.
QE1 happened back in the fall of 2008 when Wall Street got bailed out by the government. Banks were failing, stocks were tumbling, and the whole world was watching.
QE2 happened in November 2010. The economy was still recovering from the financial crisis of 2008 and not growing as fast as the Federal Reserve wanted it to. So, the Central Bank bought Treasury Bonds to speed up the recovery.
And then there’s QE3. It hasn’t happened yet, but it could come later this week. The FOMC (Federal Open Market Committee) has a two day meeting which ends on Thursday, and given the weak Employment Report that came out last Friday, many on Wall Street expect Chairman Ben Bernanke to announce a third round of quantitative easing.
Some people like the idea, while others think the Federal Reserve should stay out of it and let the markets do what they will.
I’m just glad it has nothing to do with the Queen. She’s got enough to think about with weddings, jubilees, her Corgis, and Vegas baby (LOL).
Peace Love Profits,