The Federal Reserve is today likely to announce the end of the program of buying long-term securities - the so called quantitative easing 3 (QE3 - it was done twice before). QE3 started in September 2012, with monthly purchases by the FED of $85 billion (or about $1 trillion a year). The goal was to stimulate the economy and lower unemployment to 6.5%. Unemployment did fall and, after over one year, the FED started tapering (reducing) the purchases over time; the last month it was only $15 billion.
What is uncertain is whether the FED is prepared to raise interest rates. Unemployment is below 6% and the US economy is in good shape. But while unemployment is low, employment is low as well. As a result of the recession a lot of people dropped out of the labour force.
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