QE, or quantitative easing, is the action the Federal Reserve takes to buy mortgage and treasury bonds in the open market with the hopes of pushing down interest rates to a point that will jump-start the economy. QE also has a great effect on the stock market because it artificially boosts stock prices, giving the economy a chance to come around. The Federal Reserve has already implemented two rounds of quantitative easing, which has swelled their portfolio of mortgage and treasury bonds to a record $1.8 trillion. The treasury also recorded over $70 billion in trading profits in 2011 from …
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