Stocks Surge As Fed Prints More Money (Effectively)

Stocks surged today after the Fed said it would buy $300 billion in longterm Treasurys and hundreds of billions of mortgage-backed securities. Effectively, it’s like an interest rate cut, or printing more money. By increasing the amount of money in the system, banks will be able to borrow more cheaply and could prompt lower mortgage rates and more lending. Remember when we told you what “quantitative easing” was? This is it, folks, and it’s big.

Fed to Buy $300 Billion of Longer-Term Treasuries [Bloomberg] (Photo: Tjeerd)

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