QE2 will mean $600 billion in asset purchases, half the amount originally rumored but double the rumor of this morning.
My reaction? BFD.
Here’s the meaty part from Ben:
To promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to expand its holdings of securities. The Committee will maintain its existing policy of reinvesting principal payments from its securities holdings. In addition, the Committee intends to purchase a further $600 billion of longer-term Treasury securities by the end of the second quarter of 2011, a pace of about $75 billion per month. The Committee will regularly review the pace of its securities purchases and the overall size of the asset-purchase program in light of incoming information and will adjust the program as needed to best foster maximum employment and price stability.
There’ll be some hysterical stuff being written, tweeted, posted, whatever. Just relax. It’s going to be incremental, not shock and awe, so it can be dialed back if and when it becomes apparent to the program’s stewards that it needs to be. We hope.
Don’t look at me, I’m in the Raise Rates Camp, remember? I’m one of the original One Percenter’s.