To stimulate the economy via continued low interest rates, the Federal Reserve in September launched its third round of quantitative easing. This program, however, differs from the first two initiatives, according to economic experts, in that it potentially creates a semipermanent buyer for mortgage-backed securities — which may help keep today’s low rates low.
The Fed pledged to purchase $40 billion per month in government securities, primarily those secured by residential mortgages (mortgage-backed securities, or MBS). QE3 swung into gear immediately with the purchase of $23 billion in securities.