Experts have questioned how effective the latest round of quantitative easing (QE) in the US will be, with the chances of success "finely balanced".
Last night the US Federal Reserve's chairman Ben Bernanke announced a third round of QE which will see the central bank pump $40bn in the economy every month in a bid to boost the economic recovery.
The Fed will focus on buying mortgage backed securities (MBS) and has said it will continue to pump money into the system well into the recovery, setting no end date. It has also committed to leave its policy rate at near zero until mid-2015.
However, Paul Ashworth, chief US economist at Capital Economics, said the QE package was smaller than he would have expected, as it works out as €480bn a year.
"But the Fed pledged to continue those purchases until it judges that the outlook for the labour market has improved substantially," he said.
"That is deliberately vague but, if we assume that it means until the unemployment rate gets down to 7% and that the Fed's new forecasts will show the unemployment rate won't get down to that level until some time in 2015 then the Fed today has effectively pledged to buy $40bn of MBS for three years, which adds up to $1,440bn."
That would mean QE3 was roughly the same size as QE1, although it will be over a much longer period of time.
Ranvir Singh, chief executive at market analysts RANsquawk, said that while the latest round of QE was a shot in the arm, it was a mild one.
"And its success is far from assured," he said.
"In the face of overwhelming pressure and underwhelming jobs numbers, the Fed has bowed to the calls for further stimulus."
He said that while the scale of the cash injection was less than some had expected, the decision to keep it open-ended was a "clear statement of intent".
"Chairman Bernanke is gambling that this latest burst of QE will have the desired effect, and quickly, as his monetary stimulus toolbox is almost bare," he added.
"But given the pattern of diminishing returns from central bank action, and the relatively modest amount of new money being printed, its chances of success are finely balanced."
Marcus Bullus, trading director at MB Capital, added that while markets had got what they wanted, "deep down they wanted more".
"The feeling in the markets is that the Fed could have gone further," he said.
"The response has been positive, but it hasn't been euphoric."
Trevor Greetham, director of Asset Allocation at Fidelity Worldwide Investment, said the actions taken by Bernanke supported his long-standing overweight position in US equities versus Europe.
"As for overall market levels, we may see a period of consolidation as those who bought the well-flagged rumour sell the news," he said.
"We're hopeful this ease will help trigger a new economic upswing but these things don't happen overnight.
"Soft economic data could create some good buying opportunities in the next few months."
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