Chairman of the U.S. Federal Reserve Ben Bernanke hosts a news conference following a Federal Open Market Committee (FOMC) meeting in Washington D.C., capital of the United States, Dec. 12, 2012. The U.S. Federal Reserve on Wednesday announced that it would continue buying longer-term Treasury securities and keep its key short-term rate near zero until the country's unemployment rate drops below 6.5 percent, so as to stimulate economic growth and job creation. (Xinhua/Zhang Jun)

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News Analysis: U.S. Fed expands QE3, sets policy thresholds to spur recovery

by Xinhua Writer Jiang Xufeng

WASHINGTON, Dec. 12 (Xinhua) -- After its final policy meeting of this year, the U.S. Federal Reserve on Wednesday announced to continue pumping money into the economy by buying assets and hold its short-term rate near zero until the unemployment rate drops below 6.5 percent, an aggressive move to stimulate economic growth and job creation.

But some economists cautioned that a long-period of historically-low interest rate since the end of 2008 and large asset-buying programs have underpriced credit and increased risk taking, fueling asset bubbles in the global stock and commodity markets, but could not provide a strong boost to U.S. business hiring and economic recovery.  Full story

Chairman of the U.S. Federal Reserve Ben Bernanke hosts a news conference following a Federal Open Market Committee (FOMC) meeting in Washington D.C., capital of the United States, Dec. 12, 2012. The U.S. Federal Reserve on Wednesday announced that it would continue buying longer-term Treasury securities and keep its key short-term rate near zero until the country's unemployment rate drops below 6.5 percent, so as to stimulate economic growth and job creation. (Xinhua/Zhang Jun)

Chairman of the U.S. Federal Reserve Ben Bernanke hosts a news conference following a Federal Open Market Committee (FOMC) meeting in Washington D.C., capital of the United States, Dec. 12, 2012. The U.S. Federal Reserve on Wednesday announced that it would continue buying longer-term Treasury securities and keep its key short-term rate near zero until the country's unemployment rate drops below 6.5 percent, so as to stimulate economic growth and job creation. (Xinhua/Zhang Jun)

Chairman of the U.S. Federal Reserve Ben Bernanke hosts a news conference following a Federal Open Market Committee (FOMC) meeting in Washington D.C., capital of the United States, Dec. 12, 2012. The U.S. Federal Reserve on Wednesday announced that it would continue buying longer-term Treasury securities and keep its key short-term rate near zero until the country's unemployment rate drops below 6.5 percent, so as to stimulate economic growth and job creation. (Xinhua/Zhang Jun)

Chairman of the U.S. Federal Reserve Ben Bernanke hosts a news conference following a Federal Open Market Committee (FOMC) meeting in Washington D.C., capital of the United States, Dec. 12, 2012. The U.S. Federal Reserve on Wednesday announced that it would continue buying longer-term Treasury securities and keep its key short-term rate near zero until the country's unemployment rate drops below 6.5 percent, so as to stimulate economic growth and job creation. (Xinhua/Zhang Jun)

Chairman of the U.S. Federal Reserve Ben Bernanke hosts a news conference following a Federal Open Market Committee (FOMC) meeting in Washington D.C., capital of the United States, Dec. 12, 2012. The U.S. Federal Reserve on Wednesday announced that it would continue buying longer-term Treasury securities and keep its key short-term rate near zero until the country's unemployment rate drops below 6.5 percent, so as to stimulate economic growth and job creation. (Xinhua/Zhang Jun)

Chairman of the U.S. Federal Reserve Ben Bernanke hosts a news conference following a Federal Open Market Committee (FOMC) meeting in Washington D.C., capital of the United States, Dec. 12, 2012. The U.S. Federal Reserve on Wednesday announced that it would continue buying longer-term Treasury securities and keep its key short-term rate near zero until the country's unemployment rate drops below 6.5 percent, so as to stimulate economic growth and job creation. (Xinhua/Zhang Jun)

Chairman of the U.S. Federal Reserve Ben Bernanke hosts a news conference following a Federal Open Market Committee (FOMC) meeting in Washington D.C., capital of the United States, Dec. 12, 2012. The U.S. Federal Reserve on Wednesday announced that it would continue buying longer-term Treasury securities and keep its key short-term rate near zero until the country's unemployment rate drops below 6.5 percent, so as to stimulate economic growth and job creation. (Xinhua/Zhang Jun)

Chairman of the U.S. Federal Reserve Ben Bernanke hosts a news conference following a Federal Open Market Committee (FOMC) meeting in Washington D.C., capital of the United States, Dec. 12, 2012. The U.S. Federal Reserve on Wednesday announced that it would continue buying longer-term Treasury securities and keep its key short-term rate near zero until the country's unemployment rate drops below 6.5 percent, so as to stimulate economic growth and job creation. (Xinhua/Zhang Jun)