What will the Fed do?

THERE seems to be some consensus that by the end of the year the Federal Reserve will have begun easing policy once again. The question then becomes: how will they do it? Jon Hilsenrath reports: "Rather than announce massive bond purchases with a finite end, as they did in 2009 to shock the U.S. financial system back to life, Fed officials are weighing a more open-ended, smaller-scale program that they could adjust as the recovery unfolds...Under the alternative approach gaining favor inside the Fed, it would announce purchases of a much smaller amount for some brief period and leave open the question of whether it would do more, a decision that would turn on how the economy is doing. This would give officials more flexibility in the face of an uncertain recovery..."

Read at The Economist

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