While the Fed didn’t officially give us QE3 today, the US Treasury market has handed it to us instead. Even before today’s further yield drop to new lows, yields have been falling steadily since early July. Yes it was in response to the steadily weakening economy and troubles in Europe but lower rates were had as a result nonetheless which is what any sort of quantitative easing is aimed to do. With another drop in longer end yields today to the lowest since Dec ’08, the Fed has achieved its desire without having to buy a single new US Treasury on top of what they are already buying.
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