Good news! Federal Reserve Chairman Ben Bernanke announced today that the fed will begin a third round of quantitative easing, except this time the fed's bond-buying will remain open-ended until they are satisfied with the pace of recovery.
(Reuters) - The Federal Reserve launched another aggressive stimulus program on Thursday, saying it will buy $40 billion of mortgage debt per month and continue to purchase assets until the outlook for jobs improves substantially.
In a significant shift in the direction of U.S. monetary policy, the Fed has tied its unconventional bond buying directly to economic conditions, a move that is likely to be controversial among central bank critics. [...]
The new move is even bolder than many investors had anticipated given its open-ended nature and clear links to unemployment.
According to Bernanke himself, QE2 contributed as many as 600,000 jobs to the economy. QE3, because of its open-ended nature, seems to be more aggressive.
Why is it a big deal that this round will be open-ended? Because stimulus is being tied directly to economic performance rather than it being a fire-and-forget mechanism. Because of this, QE3 may not end any time soon.
I wouldn't say this is a magic lever you can pull that will deliver re-election to the White House, but this will undoubtedly help.
Republicans are going to come unglued and unhinged over the next several days as they attack Bernanke for daring to help the economy.