Health & Fitness
QE3 Distinctly Different From Its Predecessors
What's different this time? The Fed has changed up its strategy in hopes of improving the outcome for QE3. Here are three key components of this latest initiative:
On September 13, Federal Reserve Chairman Ben Bernanke announced that the Fed would embark on its third round of large-scale bond purchases since the beginning of the financial crisis five years ago–Quantitative Easing 3 (QE3).What’s different this time? The Fed has changed up its strategy in hopes of improving the outcome for QE3. Here are three key components of this latest initiative:
- Unlike QE1 and QE2, the Fed did not set a limit on the ultimate amount it would buy or how long the program would last.
- The focus will be on purchasing $40 billion per month of agency mortgage-backed securities rather than U.S. Treasuries.
- The Fed expects to continue its near-zero interest-rate policy until mid-2015.
What does this mean for investors?
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Payson Swaffield, Chief Income Investment Officer at Eaton Vance, offers his take on QE3 along with investment strategies to consider in the latest Eaton Vance Income Market Insight.
