Fed Begins Another Round of Stimulus

Washington, DC, Nov. 4, 2010 -- The Federal Open Market Committee voted on Wednesday to buy an additional $600 billion in Treasurys over the next eight months to stimulate the economy.

The Fed also announced it will reinvest an additional $250 billion to $300 billion in Treasuries with the proceeds of its earlier investments.

The Fed also reiterated its bearish view on the stalling economy, saying "the pace of recovery in output and employment continues to be slow."

The Fed has already kept the federal funds rate, a benchmark for interest rates on a variety of consumer and business loans, at historic lows near zero since December 2008. The Fed said Wednesday that it would continue to hold the rate at "exceptionally low levels" for an "extended period."

But critics of QE2, including some Fed members, believe that too much monetary stimulus might lead to runaway inflation that could derail the economy, or future asset bubbles that could endanger economic stability over the long term.