A Federal Reserve Emergency Rate Cut and $700 Billion Quantitative Easing Program Explained



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The Federal Reserve just had an emergency session where they cut the Federal Funds rate by 100 points. The federal funds rate is now a quarter of a percentage point. At the same time they have escalated their quantitative easing program to buy five hundred billion dollars worth of Treasury Bills and two hundred billion dollars worth of Mortgage Backed Securities. Here’s what the Federal Reserve hoped would happen, what actually happened, and why it matters.


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