The End of QE2

The Federal Reserve's program of quantitative easing, or QE2, comes to an end this week. Since November, the Fed has been buying up around $75 billion worth of Treasurys each month, but June will be the last month in which they do so. One of the goals of this was to bring down the yield of Treasurys, pushing investors into riskier vehicles and keeping the government's borrowing costs low. To that end, it worked very well: the 10-year Treasury is now yielding below 3 percent.

But what will be the effects of the end of QE2? The stock market probably won't react at all, since the timing of this has been much-anticipated, and the effects have already priced into current market trends. But the bond market could see some increased volatility, as other purchasers step in - or don't step in - to buy up what the Fed is no longer buying.

Perhaps more significant will be the effect on the larger economy. Many people feared that pumping all those extra dollars into the American economy would lead to inflation, so we may see prices ease back a little now. Many experts also feel that the dollar could rise, since its value will no longer be diluted with so many extra dollars flooding the market.