At the Nov. The policy change was largely priced into the markets ahead of the November FOMC meeting, as financial markets are forward-looking. The financial market effects of QE2 were entirely conventional. In particular, real interest rates declined, expected inflation increased, the dollar depreciated and equity prices rose. The purchases of longer-term Treasury securities essentially lowered the risk-free real interest rate, which then caused some investors to switch to riskier assets—most notably U.
Following the November decision, many people expected the program to have no impact. While the effects on financial markets occurred during the run-up to the November decision, effects on the real economy e. Determining exactly which movements in real variables are due to monetary policy and which ones are due to other influences on the economy that occur in the meantime can be difficult.
Disentangling these effects is a standard problem in monetary policy analysis. However, the real effects of the asset-purchase program will most likely be conventional, just as the financial market effects were. As the experience with quantitative easing has shown, monetary policy can be effective even when nominal interest rates are at the zero bound. QE2 was successful as a classic easing of monetary policy in that the imprint on the financial markets looked just like a standard, aggressive monetary policy easing.
Sign in. Accessibility help Skip to navigation Skip to content Skip to footer. Choose your subscription. Trial Try full digital access and see why over 1 million readers subscribe to the FT. For 4 weeks receive unlimited Premium digital access to the FT's trusted, award-winning business news. Digital Be informed with the essential news and opinion. Delivery to your home or office Monday to Saturday FT Weekend paper — a stimulating blend of news and lifestyle features ePaper access — the digital replica of the printed newspaper.
Team or Enterprise Premium FT. Analytics cookies We use analytics cookies so we can keep track of the number of visitors to various parts of the site and understand how our website is used. Skip to main content. Home Monetary policy What is quantitative easing? What is quantitative easing? Quantitative easing is when we buy bonds to lower the interest rates on savings and loans. That helps us to keep inflation low and stable.
Why do we use quantitative easing? How does quantitative easing work? QE also affects the prices of other assets like shares and property. Does quantitative easing work? How much quantitative easing have we done in the UK? Does quantitative easing help to pay for government spending? We do it to keep inflation low and stable and support the economy. How have prices changed? Back to top.
This page was last updated 08 November Give your feedback. Yes, it was useful Yes. No, it wasn't useful No. Page Url.
0コメント