Fed to avoid 'shock and awe' QE; Treasury and gilt yields keep rising

The Federal Reserve is set to embark on a programme of measured quantitative easing next week, avoiding the ‘shock and awe' system used during the financial crisis.

According to the Wall Street Journal, the Fed is likely to buy a few hundred billion dollars of treasuries over several months, far less than the $2trn of asset purchases through the financial crisis. The announcement is set to be made following the two-day meeting of its policy-making committee next Wednesday. Officials want to avoid the "shock and awe" style used during the crisis, the WSJ says, allowing the central bank to adjust its policy over time. The yield on the benchmark 10-year US treasury has climbed 4 basis points today, to 2.68%. Citigroup says the 10-year treasury...