The Fed's new open-ended MBS-purchase program will have investors playing a guessing game each month. But taking Chairman Bernanke's Jackson Hole speech, where he noted QE1 and QE2 (combined size of $2.3T) added about 2M jobs, Barclays believes the Fed will purchase about $630B for a 550k boost to jobs growth. That's the amount of jobs needed to take the unemployment rate down to 7% at 2014-end as newly forecasted by the Fed yesterday, from 7.35% in its previous outlook. At $40B/month, that means the program should last roughly 15 months.
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