Fed’s stimulus plan to lift stock prices

The Federal Reserve’s new economic stimulus plan involves printing vast sums of money to help people buy homes, but over the next year the programme could do more to boost the economy by lifting stock prices.

The Fed said last week it would buy $40bn (€30bn) every month in mortgage backed securities until the labour market improves substantially.

The programme, known as “QE3”, will likely lower mortgage interest rates and also help some people refinance home loans.