In analyzing the economic and financial market impacts of the QE announcements, what are the probable reasons for the changes in the behavior of:

• short-term interest rates,
• long-term interest rates,
• credit default swaps, and
• inflation expectations

Hint: This question is asking for reasons, not a summary of the changes in the Tables. For example, 10 year Treasury yields declined 107 basis points in QE1. Why

Give the reasons for why the decline.

Table 1: Changes in Yields (in Basis Points) on Select Securities a The credit default swap yield in this table corresponds to an index of Baa corporates. Table 2: Changes in Yields (in Basis Points) on Federal Funds Futures by Maturity