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The Federal Reserve s Historic Economic Experiment

The Federal Reserve s Historic Economic Experiment Enters A New Phase


Since the global financial crisis, the Federal Reserve has been conducting an experiment with the U.S. economy.

In 2008, when short-term interest rates fell to zero and the Fed was out of conventional tools for stimulating economic growth, the Fed resorted to quantitative easing.    

Quantitative easing has been tried a few times before in the last two decades, but never by an economy approaching the size of the U.S.

The Fed bought massive amounts of long-term Government-backed bonds, which kept long-term interest rates low, while increasing the money supply and stimulating business activity.

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