Federal Reserve to Launch New Bond-Buying Program (QE4?)Submitted by PWA on Thu, 11/15/2012 - 15:14
The Federal Reserve signaled Wednesday that it will likely announce a new bond buying program in December to try to spur job growth.
The purchases would be intended to lower long-term borrowing rates to encourage spending and strengthen the economy. The hope is that more hiring would follow.
Minutes of its Oct. 23-24 policy meeting suggest that the Fed will unveil a Treasury-buying plan to replace a program that expires at year's end. Under the existing program, called "Operation Twist," the Fed has been selling $45 billion a month in short-term Treasurys and using the proceeds to buy an equal amount of longer-term securities.
When Operation Twist ends, the Fed will run out of short-term investments to sell. The minutes show support among the Fed's policymakers to replace Twist with another program of long-term bond purchases.