Question

Explain what actions the FED took during its rounds of quantitative easing following the last recession.

Answer 1

The Fed launched series of rounds of quantitative easing after the 2008 recession, eventually trillions of dollars of government bonds and mortgage-backed securities were purchased. In 2008 FED made purchases of $800 billion. These purchases included bank debt, Treasury notes, and mortgage-backed securities. In 2009, the Fed bought $300 billion of longer-term Treasurys. At the end of the second quarter of 2011 it bought $600 billion of Treasury securities. In 2012 it bought $40 billion in mortgage-backed securities. In December 2012, $85 billion purchases were made which included long-term Treasurys and mortgage-backed securities. All of the above was done to stimulate the economy by adding to the money supply.