Fed Reserve Split over Whether to End 'Quantitative Easing'
On Wednesday, Federal Reserve minutes released from its June meeting revealed that Fed officials are split over whether to begin ending the central bank’s “quantitative easing” policy of buying $85 billion of bonds each month.
“About half of these participants indicated that it likely would be appropriate to end asset purchases late this year,” read the minutes. “Many other participants anticipated that it likely would be appropriate to continue purchases into 2014.”
The Fed’s unprecedented easy-money policies have recently created a rollercoaster ride for U.S. and world markets as investors begin anticipating the removal of the Fed’s near-free cash grab. In May, the Federal Reserve’s massive pumping helped drive the Dow Jones Industrial Average to a record 15,000.
Last month, however, news of the Fed’s possible unwinding of its monthly injections of cash sent the Dow on a 550 point nosedive over two days.
"It's a total Fed-driven stock market," said chief executive of TrimTabs Investment Research David Santschi in May.
Last week, the Federal Reserve’s balance sheet liabilities hit a record $3.450 trillion.