Quantitative easing: the fed’s latest attempt to improve the economy

The Federal Reserve Bank announced Wednesday that it will once again make a large purchase of Treasury Bonds ? $600 billlion worth ? as part of a Quantitative Easing to help the struggling economy. The response of many to this news: “Quantitative what?” Louise Story, Wall Street and Finance Reporter for our partner The New York Times, joins the show to break it down.

The Fed has two big strategies for getting the money flowing: spend money, or cut the interest rate. But when they’ve tried both (they have), and when the problem still isn’t solved (it isn’t), the Fed tries strategy three, basically printing cash. The strategy came from Japan, where it was first used in 2000. (It didn’t work as well as they’d hoped.) It’s been done here in the states once before; The Fed made a similar decision in 2008. Is the second time a charm?