Fed’s QE2 Program Ends Today

The second round of quantitative easing (QE2) — the Federal Reserve’s program to buy $600 billion in Treasury bonds — will end June 30, with mixed results.

Although experts believe the effort demonstrates how monetary policy is limited in its ability to correct the U.S. economy, they say it did have an impact in terms of minimizing the risk of deflation and bolstering financial markets.

However, it did not strengthen economic recovery; and while easing by the central bank could lower interest rates, tighter credit standards and large numbers of underwater loans have made it difficult for borrowers to refinance.

Source: “QE2: Fed Bond Purchases End, Leaving Mixed Legacy as Economic Recovery Lags,” Washington Post, Neil Irwin (June 30, 2011)

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