Saturday, 20 October 2012

What the Fed’s stimulus means for investors

By By Andrew Menachem


Several weeks ago, the Federal Reserve announced its top priority would be to stimulate the economy, even if that led to an increase in inflation. That means the Fed may plan to keep short-term interest rates at record lows through mid 2015. It will likely buy mortgage bonds seeking to make home buying more affordable, and consider other steps if the economy remains sluggish.
Around the world, the European Central Bank (ECB), the People's Bank of China and other central banks have also adopted "quantitative easing" monetary policies designed to spur lending and boost national economies.
So, what does this long-term low-rate financial environment mean for investors?

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