Federal Reserve Federal Open Market Committee announced that the market has been concerned about the planned second round of quantitative easing is expected to start in just over, the Government plans to purchase 6,000 billion in total long-term bonds. QE2 3 minutes after the announcement, “New York Times” published an article entitled “Fed to buy 600 billion U.S. dollars debt that the economic recovery is too slow” comment. Day after the U.S. stock market to receive this message in Yindie support rising again, the Dow Jones index hit a new high of two years.

Federal Reserve describes the situation when the economy recovers, the use of a “slow and disappointing,” instructed the New York Fed is responsible for the implementation of debt purchase plan. Special instructions FOMC’s open market trading in New York Office of the Federal Reserve in 2011 before the end of the second quarter of $ 600,000,000,000 to buy longer-term bonds. So calculated, the office is expected to open market transactions before the end of the second quarter of next year, invest 250 billion to 300 billion U.S. dollars. The two together, is expected before the end of the second quarter of 2011, will purchase a total of 850 billion to 900 billion U.S. dollars in the longer-term Treasury securities, the average monthly purchases of about 110 billion U.S. dollars, of which about 75 billion U.S. dollars with the new bond purchase plan, whereas the procurement of about 350 billion dollars in investments and benefits and then.

QE 600 billion U.S. dollars of the total size of just over 500 billion U.S. dollars the original market expectations, but the average monthly purchase amount of 75 billion U.S. dollars less than the monthly average of 100 billion U.S. dollars the original market expectations. We believe that if the dollar continued to depreciate the formation of the state, the Chinese government may be Forced to accelerate monetary tightening, raising interest rates to increase capital controls, which form long-term bearish on the market.

U.S. stocks rebound in Asia-Pacific stock markets rose across the board on November 4, in which Hong Kong’s Hang Seng index hit a 6 June 2008 the highest since the opening point: 24,377.07 points. Mark Zandi, chief economist at Moody’s, said: “This plan will not solve our current problems in the United States, but really good for economic growth.”

Analysts pointed out that the quantitative easing policy announcement in the U.S. mid-term elections, the mean far-reaching. U.S. Democratic Party control of the fight in the Senate, successfully won half the seats to 51 seats to 47 seats defeating the Republican, successfully left behind the Senate. However, competition seats in the House, the Republican Party, 183 seats to 239 seats on the absolute advantage wins.

Court House battle breaks out, whether the quantitative easing policy are implemented in the future? “Will be completed, the Federal Reserve to listen to the president, but highly controversial within the Fed. Indeed, the existence of disputes within the Fed. Inflation here. Currently, the Fed’s balance sheet, although the economy into recession, but the Fed’s total investment was as high as 2.3 trillion U.S. dollars, 3 times the 2007 level.

After the announcement of the resolution, the investor will invest into the stock market quickly, the dollar index fell in the 3rd, as of press time, the dollar index losing streak 3 days, and further to 76 approaching, more and more from the 2009 low of 74.26 in recent . The last Wednesday in the commodity markets, only appeared in the international spot gold fell, closing at $ 1,348.55 / oz, down 8.9 U.S. dollars.

Federal Reserve Chairman Ben Bernanke said that the current over-reaction on inflation concerns, the financial crisis in the 1.7 trillion into the market did not cause inflation. Into the last round of economic stimulus is mainly used to repair the flow of the balance sheet of U.S. banks to maintain bank-centered economic order, market for new stimulus plan may not over-worry.

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