The Federal Reserve announced an indefinite $40 billion per month round of quantitative easing. This new phase of easing will combat a weakening economy, strengthen confidence in the financial system and assure that the central bank's mandates on unemployment/housing are met. The economy is weakening? We're heading into recession? No kidding. According to the recently released unemployment survey there was a -119,000 change in employed persons to go along with an addition of 581,000 people not in the labor force. Not sure I see the logic this time around. The Fed wants to keep interest rates low to encourage an underemployed workforce with little savings in a stagnant economy to purchase houses. Young people are delaying marriage, delaying having children, moving back with parents, have very little savings, and are saddled with loads of student debt in an economy where they see poor career prospects. And the Fed wants to purchase MBS from the large banks? Hmmm... Monetary policy is good for keeping confidence in the financial system and preventing panicks - Friedman philosophy. I don't think it is entirely up to the central banks to command the economy to grow in such a manner. However, if any central authority is going to command the economy to grow faster it will be the national government (fiscal policy) - Keynesian philosophy.