“The new policy unveiled by the Federal Reserve Wednesday likely aims to push up stock prices to appease Baby Boomers, many of whom are invested in equities, said Edward M. Dempsey, founder of Pension Partners LLC.
At this week’s monetary policy meeting, the Fed unveiled plans to beef up its current quantitative easing program, a monetary stimulus tool that sees the U.S. central bank buy $40 billion in mortgage-backed securities a month from banks on an open-ended basis to spur recovery.
Going forward, the Fed will now snap up an additional $45 billion in Treasury holdings from financial institutions alongside its purchases of mortgage debt.
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