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Economics

Misconceptions About Fed’s Bond Buying

Sept. 3 (Bloomberg) -- To combat the recession that began in 2007, the Federal Reserve and some other central banks have been buying large amounts of long-term bonds. The novelty of this quantitative easing makes the policy especially prone to popular misconceptions.

Misconception No. 1: QE bond purchases are comparable to stimulus spending on roads and tax cuts, which adds to the national debt.