By Dan Szematowicz, CNN
[Updated at 2:22 p.m ET] The Federal Reserve meeting is over. The Fed has decided not to begin a new round of quantitative easing. However, they say they remain open to further economic stimulus if the economy continues to slow.
(CNN) – This week leaders of the Federal Reserve will gather in Washington DC for its regularly scheduled contemplation of US monetary policy.
As the economy continues to do its convincing impression of a three-toed sloth, many Fed-watchers think the central bank could decide that the system needs more stimulation. Among the possible measures the Fed could take (on top of programs already in place) is another round of quantitative easing.
This means that the Fed would increase the money supply in the hopes that the economy would stir. To do that, it needs to create more money.
How does that work?
Don't expect to receive an envelope in the mail stuffed with cash.
[1:36] "It means that the Federal Reserve is buying Treasury securities,"
says Keith Logan, the Chief US Economist for HSBC Bank. He says,
[3:14] "The bank has a check from the Fed. And basically the bank then puts each check on deposit at the Federal Reserve. The Federal Reserve is a bank, a bank for banks. And the Federal Reserve creates money, creates bank money, by buying Treasury securities, by issuing a check on itself."
The Federal Reserve meets this Tuesday and Wednesday (7/31 and 8/1). We should find out what course of action the Fed has decided on shortly after the meeting ends.
Follow Dan Szematowicz on Twitter: @CNNDan