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'''''But this time, the Fed has promised that "if the outlook for the labor market does not improve substantially," it won't stop buying and could ramp up its spending further'''''.}}

'''''But this time, the Fed has promised that "if the outlook for the labor market does not improve substantially," it won't stop buying and could ramp up its spending further'''''.}}

In general, the Federal Reserve stimulates the economy by lowering short-term interest rates.  However, when short-term interest rates are lowered to zero, the Federal Reserve turns to other less frequently used actions to stimulate the economy. The Federal Reserve calls these "quantitative easing."  Basically, these involve the Federal Reserve purchasing longer-term bonds to lower the medium and long-term interest rates.

In general, the Federal Reserve tries to stimulate the economy by lowering short-term interest rates.  However, when short-term interest rates are lowered to zero, the Federal Reserve turns to other less frequently used actions to with a goal of stimulating the economy. The Federal Reserve calls these "quantitative easing."  Basically, these involve the Federal Reserve purchasing longer-term bonds to lower the medium and long-term interest rates.