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FBN’s Lou Dobbs on how the Federal Reserve’s quantitative easing impacts the economy and markets.
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Friday's weaker than expected jobs report is sparking some calls now for the Fed to pull the trigger on QE3.
The free marketeers have free enterprise spokes.
Are the same people most of which are expressing their hope that there will be a QE3 isn't that ironic.
Or hypocritical if you prefer in fact a new -- poll.
Finds a majority of the biggest financial institutions now say the Fed will undertake a third round of monetary stimulus.
But is it really necessary to keep popping all of that money into our financial system.
The Fed announced the first round of quantitative easing back in November 2008.
Initially the plan was to buy 500 billion dollars.
And let's this way the QE1.
Of the spectrum 2000.
Eight.
And then for seven B five.
Hundred billion.
Dollars.
If mortgage backed securities.
But that rose then -- and this didn't take long.
-- 1250.
Billion.
And -- got a little boost to help lower interest rates back and you may remember this the Fed also -- 300 billion dollars in long term treasury securities.
The day after the Fed's announcement by the way and this is where people get excited.
Bed now.
Had steep -- -- nearly 3%.
But it was only three days later -- to have an -- 700 point drop leaving it lower them before.
The Fed's announcement of Q we want the same thing happened when Bernanke first floated the idea of QE2.
That arrived.
QE2.
Back in August.
Starts to report monarchy doesn't QE1 QE2.
But he said in August of 2010 that have that have a another easing.
And under the program the Fed announced plans to purchase 600 billion dollars.
600 billion dollars appearing modest plan I guess.
-- look at that way again in longer term government debt.
The Dow finished more than -- 160 points higher on the 27 of August.
The next -- -- lost a 140 of those -- what has ballooned in those three and a half years.
Of aggressive buying by via fed is its balance sheet of course in fact -- -- is now sitting on are you ready for this.
The Fed balance sheet.
Is two point 89.
That's -- T for trillion -- Dollars.
That is just just about three.
Times what it was.
The beginning.
Of 2008.
So.
Can we stand another QE.
I can we survive not having another Q -- -- the real ways to grow wealth in this country of course is.
To create profits and to build the balance sheets in the private sector.
And over the next two weeks about a third of the S&P 500 companies will be reporting their first quarter earnings tomorrow we have the first when -- causes.
Traditional.
And there are some pretty impressive.
Estimates on what those profits will look -- Other down and have been initiated down rather frequently over the course for the past six months.
But still growth is expected.
Now I call that quantitative.
-- And it's the foundation.
For a return to prosperity.
Not Q we three.
Or four or far.
I think it just spend a lot of my plants down on Wall Street but.
