Duration: 3:58 min
 Description: Im Alex Villarreal with the VOA Special English Economics Report from voaspecialenglish. The Federal Reserve calls Americas economic recovery disappointingly slow. So the Federal Reserve decided to add six hundred billion dollars to the financial system by the middle of next year. To do this the central bank will buy Treasury securities from dealers. The action is known as quantitative easing. The goal is to reduce longterm interest rates. The hope is to create conditions where businesses will invest more and people will spend more. Buying longerterm Treasury securities will make less government debt available to investors. This will raise the price. As bond prices rise their rates fall. Longterm securities affect rates on home mortgages and other loans. Lower rates on corporate bonds could lead businesses to invest in more equipment and jobs. Lowering shortterm interest rates is the Federal Reserves main way to get banks to increase lending. But those rates are already near zero.The Fed earlier bought one trillion seven hundred fifty billion dollars of Treasuries and other securities. That program ended in March. Fed Chairman Ben Bernanke wrote in The Washington Post Easier financial conditions will promote economic growth. But interest rates are already low. And critics say further cuts are unlikely to create much growth.Inflation also is low so low that some economists worry more about the risk of falling prices and wages. But others say ...

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