QE2, Day One: Fed Buys $7.3 Billion in Treasuries

The Federal Reserve bought $7.3 billion worth of U.S. Treasuries Friday as it started a second round of quantitative easing meant to stimulate the nation's economy, media reports indicate.

With the government's fiscal stimulus expired, and with little hope of additional stimulus spending being approved by Congress in the near future, the Fed had to take action in an attempt to reduce the high U.S. unemployment rate and avert deflation.

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But with benchmark interest rates near zero, and after an earlier program to buy $1.7 trillion worth of securities failed to reduce unemployment, the Fed announced last week its unconventional monetary easing plan of buying $600 billion worth of longer-term bonds through June. The plan has been highly criticized.

In its first day, the Fed acquired 16 of the 24 securities maturing from November 2014 through April 2016 that were listed for possible purchase on the Federal Reserve Bank of New York's website, Bloomberg reported. And according to Reuters and CNBC, after the Fed completed its purchases Friday morning, prices of U.S. Treasuries hit session lows.