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How QE3 could help the economy

U.S. President Barack Obama (3rd R) shakes hands with Federal Reserve Bank Chairman Ben Bernanke (C) as FDIC Chair Sheila Bair (2nd L) looks on. Chip Somodevilla/Getty Images

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Yesterday Federal Reserve Chief Ben Bernanke laid out the Fed’s new economic stimulus plan. It’s round 3 of so-called quantitative easing. The Fed will buy $40 billion worth of mortgage-backed securities every month, until it decides the economy has improved.

The focus is primarily on housing, says Chris Low, chief economist for FTN Financial in New York, and that has roots in a number speeches given in the past year with the theme that a housing recovery is central to a broader economic recovery.

“They seem determined to deliver on housing,” he says.

 

 

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