The Federal Reserve yesterday fired the starting gun on QE3 as it said it was ready to throw potentially unlimited firepower at the flagging US recovery.
Ben Bernanke, the Federal Reserve chairman, who trailed the move in his Jackson Hole speech two weeks ago when he expressed "grave concerns" over the stuttering US jobs market, will launch the latest burst of quantitative easing as soon as today.
Rate-setters have already pumped in $2.3trn (£1.4trn) in the first two rounds of QE over the past three years.
The Federal Open Market Committee will buy up $40bn in mortgage-backed securities every month to help bank balance sheets that were left crippled by the nation's housing market collapse.
The Fed is also extending its Operation Twist programme - which aims to bring down long-term interest rates - by $45bn a month until the end of the year.
Significantly, the Fed has set no time limit on its purchases, and is ready to do as much as it takes until the economy improves. It said: "If the outlook for the labour market does not improve substantially, the committee will continue its purchases of agency mortgage-backed securities, undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved."
The last $600bn programme of QE, launched in November 2010, ran for eight months.
Unlike the Bank of England, the Fed has a dual mandate to both control inflation and ensure full employment.
But the latest disappointing figures for August showed US employers creating just 96,000 jobs - well below the level needed to cut the unemployment rate as well as boost the re-election chances of President Barack Obama.
The Fed's decision also comes in the wake of the OECD think-tank cutting its growth forecasts for the world's biggest economy, now expected to expand by 2.3% this year instead of 2.4%.