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The Fed’s actions speak louder than its words, which is why bond-buying is here to stay

Janet Yellen

For Federal Reserve officials, the sword may in fact be mightier than the pen.

That’s the finding of a new paper from Eric Swanson, a professor at the University of California, Irvine, and a former researcher at the San Francisco Fed.

Swanson compared the effects on financial conditions of the central bank’s bond-buying programs during and after the Great Recession, also known as quantitative easing, or QE, with the effects of the Fed’s forward guidance, or their verbal nods to what officials might do in the future.

Swanson found that while big announcements from the Fed might have a temporary effect on read more >>>

Source:: BusinessInsider.Com