Quantitative easing 2020: Is it 2008 all over again?

[Raphael Collazo]

With the Fed’s announcement of “quantitative easing” measures, many people believe we’re about to experience the 2008 recession all over again. However, this is not likely the case. These policies have been enacted to cushion the impact felt by businesses around the country due to the coronavirus outbreak. The hope is that once the outbreak is contained, consumers will resume spending at pre-outbreak levels. 

However, this is not a foregone conclusion. Prior to the outbreak, consumers were already on edge about a possible recession. Based on the events of the last few months and the volatility of the stock market, this belief may become a self-fulfilling prophecy. Along with that, reducing rates to almost zero may weaken the impact of future monetary stimulus when the economy actually goes through a period recession.

What do you all think? 

This video does a great job of explaining what QE is and how it helps spur the economy in times of turmoil.

https://youtu.be/llslyXPu6wI