Understanding Quantitative Easing

What Happens When QE2 Ends?


But now that the central bank's bond-buying binge is drawing to a close, even some of the Fed's toughest critics are nervous. The program—which policy wonks call quantitative easing, but nearly everyone else calls QE2—was designed to keep bond prices high and interest rates low. It is credited with propping up the economy and, in turn, boosting the stock market. Technically, the Fed is in the midst of its second round of bond buying—hence the 2—since the financial crisis struck in 2008. When the first round ended in spring 2010, both stocks and bonds tumbled

Read more: What Happens When the Fed's QE2 Ends? - SmartMoney.com http://www.smartmoney.com/investing/economy/what-happens-when-the-feds-qe2-ends-1303326131374/#ixzz1KCImSTZ3

Comment: I still find it confusing!

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