QE2 Promises HY Froth, Future Risk

Sheahan, Matthew
November 2010
High Yield Report;11/8/2010, Vol. 21 Issue 45, p24
The article reports on the plan of the U.S. Federal Reserve's Federal Open Market Committee to purchase another 600 billion dollars in longer-term Treasury securities by the end of the second quarter of 2011, an average of approximately 75 billion dollars monthly. Called the quantitative easing measure (QE2), the term loan will reportedly bring more investors into the junk bond market in search of decent yield. Portfolio manager William Larkin stated that the Federal Reserve will keep interest rates low to help consumers with adjustable-rate mortgages.


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