The Fed Kicks Off Another Bond-Buying Spree

November 4th, 2010 - 7:47 pm ICT by Pen Men At Work  

November 4, 2010 (Pen Men At Work): The Fed has kicked off yet another bond-buying spree, this time with the chief U.S. economist of Goldman Sachs, Jan Hatzius. The Federal Reserve started its new bond-buying scheme on Wednesday to bring about a much-needed improvement in the US economic system, but will the Fed’s efforts really help is a question which still does not have an answer. A representative of the Federal Reserve says that they will follow the quantitative easing theory in their bond-buying spree with Goldman Sachs. This means that the Fed will buy up to $600 billion till the end of June next year, and close to $75 billion in the month of November this year.

Since the Fed will be following a policy of quantitative easing from this month onwards, it will also buy $850 billion to $900 billion in Treasury notes over a span of five months beginning this month. It is being reported that the bond-buying spree that the Fed has engaged in is expected to prove beneficial to the Asian countries. However, many economists are of the opinion that this move may lead to higher rates of inflation in the continent. One thing though is very true and that is that the US economic system will turn relatively weak during the time the Fed engages in its bond-buying spree.

Hence Asia is the place to be in the next few years. Asia will record a steady growth in its economy if all goes according to plans.

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