Quantitative Easing

Quantitative easing (QE) refers to large-scale asset purchases by the US Federal Reserve to inject liquidity in the world’s biggest economy after the onset of the global financial crisis in late 2008. In September 2012, stubbornly high US unemployment and faltering economic growth prompted it to launch QE3, under which it planned to buy US$40 billion worth of bonds per month, with no set end date. As of late 2012, it had bought some US$2.3 trillion in long-term securities. In December 2012 it announced it was increasing its purchases to US$85 billion a month.

Mainland China’s perpetual QE and its many losers

Access to credit has been a watershed between winners and losers on the mainland. Photo: Reuters

In 1983, the People’s Bank of China had just risen from being a junior sidekick to the Ministry of Finance to an equal entity within the government.

Tuesday, 28 April, 2015, 11:15am 4 comments

It's high time for ECB to take action on quantitative easing

It's high time for ECB to take action on quantitative easing

The European Central Bank is playing with fire, and unless it takes quick action with new reflation efforts, the euro-zone economy could end up very badly burned.

28 Apr 2015 - 11:16am 1 comment

Threat of Greek euro exit could complicate ECB's quantitative easing

In Greece, a quarter of the population is unemployed.

The return of the idea of a Greek euro exit, as boogeyman or genuine threat, comes at a particularly difficult time, dangerously complicating the already fraught advent of full-scale quantitative easing in the euro zone.

13 Dec 2014 - 6:49am

Bank of Japan fills the void after Fed halts quantitative easing

Markets have surged when the Bank of Japan announced a big rise in asset purchases. Photo: Reuters

When the US Federal Reserve said it would taper its US$85 billion-a-month asset purchases under a third round of quantitative easing (QE3), financial markets went into a tailspin that inspired the term "taper tantrum".

5 Nov 2014 - 9:34am

How They See It, November 2, 2014

Federal Reserve said it would end QE3

The Federal Open Market Committee announced that it will end its bond-buying programme this month, which is a small step towards monetary normalcy.

2 Nov 2014 - 4:27am

Emerging markets face a ‘tightening test’

While the US central bank maintained its commitment to keeping rates low for "a considerable time" once it ends its asset purchases next month, it has raised the stakes for "risk assets". Photo: AFP

These are challenging times for emerging markets. First, there was the so-called taper tantrum, in reference to the financial turmoil stemming from the announcement of the US Federal Reserve winding down its programme of quantitative easing.

19 Sep 2014 - 5:28am

Structural change in United States will impact on China

Stronger dollar, devalued yuan?

As one economic problem shows signs of receding, another comes into view. Such is the nature of things. For the last five years the dominant issue has been whether or not quantitative easing (QE) would succeed in stimulating growth in Europe and the US.

17 Sep 2014 - 6:16am

Perceived shift in US Fed's monetary policy causes uncertainty

A trader listens to a broadcast of Janet Yellen's conference. Photo: Reuters

As the dust begins to settle around the latest perceived shift in policy on the part of the United States Federal Reserve, uncomfortable questions are being asked about the credibility of US monetary policy and the communication skills of the world's most closely watched central bankers.

1 Apr 2014 - 7:07pm

Emerging economies should not fear Fed tapering

Quantitative easing flooded international financial markets with liquidity. Photo: AFP

The US Federal Reserve's gradual exit from so-called quantitative easing - open-ended purchases of long-term assets - has financial markets and policymakers worried, with warnings of capital flight from developing economies and collapsing asset prices dominating policy discussions worldwide.

5 Mar 2014 - 1:51am

Easy come, easy go as emerging markets discover with US Fed tapering

Easy come, easy go as emerging markets discover with US Fed tapering

During the financial crisis, the major emerging markets escaped the damage from the United States and European Union relatively unscathed. Not any more. The rout in the capital markets of the emerging economies in the past week is a reminder that many of them face serious problems from heavy government debt to large current account deficits. In a sense, it was a continuation of the mayhem they experienced during last summer, when talks about tapering by the US Federal Reserve were first raised.

29 Jan 2014 - 4:09am

'Meaningful' job gains led Fed to trim bond purchases, minutes show

A television screen shows the Federal Reserve's decision on bond purchases after its policy meeting last month. Photo: AP

The United States Federal Reserve agreed last month to modestly reduce its bond purchases because of improvements in the job market that many Fed members felt would be sustained.

9 Jan 2014 - 11:47pm

Time to taper? Not if you look at bank loans

Roughly two-thirds of the money the Fed pumped into the banking system to ease a credit crunch has never been lent out, but stayed with the banks. Photo: AFP

The US Federal Reserve decided to hold off on scaling back its bond-buying program on Wednesday, and at least one reason for its choice may have been a stubbornly weak economic indicator: bank lending.

19 Sep 2013 - 10:51am

Bernanke: Fed will not raise rates in forseeable future

Federal Reserve chairman Ben Bernanke. Photo: AP

Federal Reserve Chairman Ben Bernanke reiterated Wednesday that the Fed is nowhere close to raising interest rates, assuring markets that the US easy money tap would not soon dry up.

18 Jul 2013 - 8:37am

Fed split in June on QE timing; Bernanke sees easy policy for now

US employment in June showed a robust gain of 195,000 jobs, although the jobless rate was steady at 7.6 per cent. Photo: AFP

About half of the Federal Reserve’s policymakers felt the US central bank’s bond-buying stimulus should be brought to a halt by year end when they met in June, but many wanted reassurance the US jobs recovery was on solid ground before any policy retreat.

11 Jul 2013 - 10:38am

Bernanke's shock announcement signals new economic sobriety

Ben Bernanke, chairman of the U.S. Federal Reserve Board

The power of words! With his brief statement that it would be "appropriate to moderate the monthly pace of purchases later this year", US Federal Reserve chairman Ben Bernanke sent global financial markets - for equities, commodities, bonds and foreign exchange - into a tailspin.

23 Jun 2013 - 4:18am