Fed’s QE2 will have ‘modest impact’, says San Francisco paper


A working paper released by the Federal Reserve Bank of San Francisco on October 24 says the effects of the Fed's second round of quantitative easing (QE2) is "likely to be modest", but will have a lasting impact on US GDP.

The authors, Han Chen, Vasco Curdia and Andrea Ferrero, find the boost to GDP growth is "unlikely to exceed a third of a percentage point" but also found inflationary consequences will be very small.

Combining QE2 with a commitment to keep interest rates low for an extended

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