Q&A: The Fed's QE gambit

By Laurence Knight
Business reporter, BBC News

Published
Image caption,
Mr Bernanke has a lot to think about

The US is stuck in a sluggish and jobless recovery. Near-10% unemployment threatens to push the country into the same economic "liquidity trap" that Japan has been mired in for 20 years.

And now Republican control of Congress seems to have eliminated any chance of a new round of government spending to reignite the economy.

With interest rates already practically zero, the US Federal Reserve has been forced to play its remaining cards: namely a second round of quantitative easing - also known as printing money.

So what is "QE2" and what will it achieve?

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