Third Quantitative Easing is a fact

The Federal Reserve is launching a third asset purchase operation, better known as Quantitative Easing (QE3). Now it seems to be without end. The Fed will buy $40 billion in mortgage bonds every month as a stimulus for the economy. Within the market, this is seen as printing money.  

In addition to this purchasing policy, the Fed has indicated that interest rates will certainly remain between 0% and 0.25% until 2015. This open-ended is reflected in the Fed's statement that stimulus will remain appropriate for a significant period of time after the economic recovery has become visible.

Prices are rising

The U.S. stock markets are rising. Gold and silver have also jumped upwards after a stable day.
The Fed justifies its choice for this purchase by expressing its concern. She indicates that economic growth will be less powerful if these measures are not taken. In addition, this would not be sufficient for a sustainable improvement in the labour market.

Open-ended

The Fed has indicated that it will spend $40 billion a month on buying mortgage bonds. No end date has been mentioned. The Fed seems to be signaling that it will continue to buy as long as it takes for the economic recovery and to reduce unemployment. In previous asset purchases between 2009 and 2011, the Fed bought $2.325 billion worth of government and mortgage bonds.

The Fed indicates that mortgage bonds will be purchased as long as the outlook for the labor market does not improve significantly.

Quantitative Easing

The Fed expects this quantitative easing to lower capital market interest rates. It can also have a positive welfare effect by increasing the value of other assets. This can lead to a boost in spending and investment. As a result of this renewed round of purchases on mortgage bonds, mortgage rates could fall, which in turn could have a positive effect on the housing market in the United States. At the same time, many critics mention that this has turned on the printing press again. There is even talk of the possibility of hyperinflation. 

Source: fd.nl