Bernanke: QE2 is About Boosting Stocks

In an op-ed piece in today’s Washington Post, Fed Chairman Ben Bernanke takes the extraordinary step of going beyond yesterday’s statement by the Federal Open Market Committee to explain more fully the central bank’s decision to purchase an additional $600 billion in Treasuries. And, as stock markets around the world are figuring out today, so-called QE2 is largely aimed at lifting equity values.

The Fed’s moves are about “easing financial conditions,” which Bernanke says will foster economic growth. “For example, lower mortgage rates will make housing more affordable and allow more homeowners to refinance. Lower corporate bond rates will encourage investment. And higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending. Increased spending will lead to higher incomes and profits that, in a virtuous circle, will further support economic expansion,” he writes.

More here: http://blogs.barrons.com/stockstowatchtoday/2010/11/04/bernanke-qe2-is-about-boosting-stocks/