This is the Cato Daily Podcast for Tuesday, September 25, 2012.

I'm Caleb Brown. The latest Fed action known as QE3 is an open-ended policy of easy money for the duration.

The duration of what isn't precisely clear.

Jim Dorne, Vice President for Academic Affairs at the Cato Institute and editor of Cato Journal comments.

What is the explicit hope among Fed policy makers or at least to the extent that they've said

what they hope happens.

What are they hoping for with QE3?

Well with QE3 is an open-ended program unlike

QE2 and QE1, where in this case the Federal Reserve

is going to buy $40 billion worth of new agency debt mortgage-backed

securities as long as the economy is still at less than full employment.

So they have an open-ended policy, there's no end date.

In fact, even after the economy begins to recover, they plan to keep interest rates low for

the foreseeable future.

So not only they're going to buy 40 billion of mortgage-backed securities each much indefinitely. They're going to keep

interest rates low until at least mid-2015. So they're extending that

interest rate policy for another year.

Their hope is that people will spend more,

investors will invest more at lower interest rates

and the housing market will rebound from the

mortgage purchases. This is what their hope is. What about savers in this whole

scenario? What happens to savers? Well savers are getting badly burnt.

...