QE2 is just about done. But the Federal Reserve will still be buying massive amounts of long-term Treasuries.

In fact, the Fed's purchases over the next year will likely be at least $300 billion. That's half the size of QE2 -- even if QE3 never takes place.

While the Fed's efforts to pump about $600 billion of new cash into the economy over the last eight months comes to an end this week, the program, known as quantitative easing or QE2 for short, was not the only way the central bank was an active buyer of Treasuries.

Since last August, the Fed purchased $250 billion in long-term Treasuries in addition to the QE2 purchases. That's because it was reinvesting the principal from other securities that matured.

Assuming the Fed keeps reinvesting, as it said it would earlier this month, it will continue to be a very big buyer of bonds in the months to come.

"We still see the Fed being a major buyer of Treasuries, and giving the market some support," said Kim Rupert, managing director of fixed income for Action Economics.

But those purchases may not push yields, which move in the opposite direction of their price, lower for that much longer.

Rupert said she expects bond yields to rise even with the Fed's continued purchases. She said some investors who bought Treasuries recently in a flight to quality will unwind those positions. If the economic outlook improves later in the year, that could also lift interest rates.

The additional Fed purchases will have an impact though. Rupert said it should "slow the updraft in yields in a measurable way."

The Fed still has more than $1 trillion in mortgage-backed securities, debt issued by government-sponsored firms Fannie Mae and Freddie Mac and other long-term bonds on its balance sheet.

While not all of this debt is set to mature in the next few months, the Fed still has a lot at its disposal to roll over into new bond purchases.

Of course the Fed could decide to stop reinvesting the principal of maturing securities. But that could almost have the same effect of actually raising interest rates. It would take significant amounts of cash out of the economy.

Even though some Fed policymakers are worried about the impact the bond buying has had on the dollar and inflation, the Fed does not seem ready to remove all its stimulus just yet. After all, the central bank did just issue a gloomier forecast for growth and unemployment through the end of 2012.

"Most of us can agree the economy is not going gangbusters and it's not a self-sustaining recovery yet," said David Coard, director of fixed income sales and trading for The Williams Capital Group. "For the foreseeable future, the Fed will have to maintain an accommodative stance. It's the only game in town."

Chinese authorities released prominent human rights activist Hu Jia Sunday, days after freeing renowned dissident artist Ai Weiwei.

"A sleepless night -- Hu Jia arrived at home at 2:30. He's safe and I'm very happy," Zeng Jinyan, Hu's wife, said in a Twitter post Sunday morning. "He needs to rest for a while."

Hu, 37, denounced China's human rights record in a series of articles ahead of the 2008 Beijing Olympics and was later sentenced to 3.5 years in prison for "inciting to subvert state power." Ai, the conceptual artist turned government critic, was released Wednesday on bail after authorities detained him for nearly three months for tax evasion, the state-run Xinhua news agency reported.

The seemingly positive news, however, has been dampened by the noticeable silence of both once-outspoken activists.

While Ai declined to answer questions from reporters outside his home early this week, police Sunday guarded entrances to Hu's apartment compound and patrolled surrounding streets. Zeng, his wife, appeared unreachable via phone or the internet.

Zeng told CNN Friday that authorities started 24-hour surveillance on her several days before Hu's expected return. In an interview last December, she predicted a virtual prisoner's life for the couple in their housing complex, called Freedom City.

"Hu Jia told me that he won't change, and police told him they may put him under house arrest in that case," she said. "I'm prepared for it."

"As long as there's no democracy or the rule of law in China, our situation won't change at all."

Last year's Nobel peace laureate Liu Xiaobo, also a rights activist, was convicted of the same crime as Hu. Liu is still serving an 11-year jail term.

Activists say the Chinese government, worried about potential uprisings inspired by the Arab Spring, has been increasingly tightening its grip on freedom of expression, targeting not only political dissidents but also intellectuals and artists.

Guo Jian said he has noticed such chilling effects from his studio at the Songzhuang art village, not far from Hu's home.

The veteran artist has been working on a startling installation piece that shows the very symbol of state power being bombed and razed. In the still-untitled diorama, model warplanes hang by thin threads fly over a miniature Tiananmen Square. The heart of Beijing is dotted with bulldozers and tanks, with the iconic Tiananmen Gate and Chairman Mao's mausoleum smashed and half-destroyed.

"The police have sent someone to say, don't show your work or don't let other people know about it," he said. "They're really worried about what I'm doing."

Guo, 48, says for the first time in his 20-year career, police now visit him regularly and plainclothes agents sometimes shadow him on the streets.

Pointing to his unfinished diorama, Guo says the authorities' outdated mentality and methods -- silencing perceived dissent through intimidation and detention -- only reinforce the message in his work: the potentially explosive consequences of suppressing people's voices for too long.

While he feels heartened by the release of fellow-artist Ai and activist Hu, Guo remains concerned about the current crackdown and doesn't see it ending anytime soon.

"Even though we got someone back, the fear is there," he said.

Four detained associates of China's recently imprisoned dissident artist Ai Weiwei have been released by the Communist government, Ai's lawyer told CNN Saturday.

The attorney, Liu Xiaoyuan, didn't talk with the four associates, but he asserted that his source about their release is reliable, he told CNN.

"Some of them are still keeping their cell phone off. They've just been released, so they might still feel terrified," Liu said.

Ai was released on bail Wednesday -- apparently with conditions -- after he spent nearly three months in prison on charges of tax evasion, according to the state-run Xinhua news agency.

Ai was not available to comment on the release of the four persons connected with his case, his attorney said.

The release of the four associates occurred Thursday and Friday, Liu said.

Wen Tao, a journalist who was taken away on April 3 -- the same day as Ai -- was released Friday night, Liu said.

Hu Mingfen, Ai's accountant, and Liu Zhenggang, the designer in Ai's studio, were released on Thursday, Liu said.

Liu said he didn't know the charges against these three associates of Ai.

The fourth associate, Zhang Jinsong, Ai's driver, was bailed out by Ai's mother on Thursday, Liu said. Zhang faces a charge of "reselling foreign exchange for profiteering," Liu said.

Beijing police have accused Ai of evading a "huge amount" of taxes, Xinhua reported in May, more than a month after he was detained.

Beijing police told state media that Ai was released on bail because of his good attitude in confessing his alleged crimes and also said he was suffering from a chronic disease. Authorities didn't elaborate.

Ai is an uncompromising, outspoken critic of Chinese policies and is renowned as a conceptual artist, particularly for designing the Bird's Nest stadium for the 2008 Beijing Olympics -- against which Ai later urged a boycott because he said China was using it as propaganda.

Ai has said he is willing to pay the taxes he allegedly evaded, police told Xinhua.

Investigators have also accused Ai's company of intentionally destroying accounting documents.

Observers in Beijing say it may not be coincidental that Ai's release on Wednesday took place on the eve of Premier Wen Jiabao's upcoming visit to Hungary, the United Kingdom and Germany, where Ai enjoys wide support among artists and politicians.

Ai also has accused the Chinese government of trying to silence dissidents.

He was seized April 3 while planning to board a plane to Hong Kong and later accused of economic crimes, a move that prompted international condemnation and added to criticism over China's controversial record on human rights.

Some commentators said they believe the arrests of Ai and his associates may have been launched in response to fears over the unrest that has swept the Middle East.

More than 130 activists have been detained in China since February following the government crackdown, according to Amnesty International.

Share investors are likely to cheer the increase in fuel prices that is expected to improve India's deteriorating finances, partly weighed down by fuel subsidies and demonstrate the government's commitment towards reforms. But this optimism is unlikely to translate into gains for stocks as the much-awaited decision on diesel and cooking gas prices will add to inflationary pressures in the short-term and may prompt the central bank to increase rates further.

"It is a bold move by the government after a long time and investors will like it," said Motilal Oswal, chairman & managing director, Motilal Oswal Financial Services . "While the move is inflationary in short term, the market has more or less discounted it, but a lot will depend on the monetary policy reaction," he said.

On June 16, the Reserve Bank of India raised key rates for the tenth time since March 2010 and is widely expected to tighten the screws further in July.

Focus to be on Europe, Crude Oil

Investors fear more rate increases would be excessive and would delay the economy's ability to bounce back once inflation settles around the central bank's comfort level of 6%. India's wholesale price inflation jumped to 9.06% in May. Fund managers expect inflation to accelerate to over 10% over the next few weeks as higher fuel prices would increase transportation costs of food.

In the longer run, most economists say, the higher price of diesel will encourage more rational use of the fuel and benefit the wider economy. "The increase in diesel and LPG prices may have an effect on inflation in the short term and in turn worry the market, but the move is beneficial for the economy and long-term investors will be happy," said Aneesh Srivastava, chief investment officer, IDBI Federal Life Insurance.

Brokers said the focus this week will continue to remain on the debt situation in Europe and the direction of crude oil prices. Benchmark Indian share indices - Sensex and Nifty - rose almost 3% on Friday, as foreign investors bought shares worth Rs 890 crore after global crude oil slid, Europe pledged to rescue Greece, and China hinted that it may be nearing the end of monetary tightening.

In the past few months, the perception of a government in disarray has gained ground as it has increasingly given the impression of being unable to deal with a blizzard of scams and agitations by groups claiming to represent civil society.

A widely-followed CEO poll carried out by industry body Ficci and published by ET in its edition dated June 13 reported that a majority of respondents expected little of the Congress-led UPA government. The price hikes may help reshape the impression of haplessness. Late on Friday, the government raised diesel rates by Rs 3, LPG by Rs 50 per cylinder and kerosene by Rs 2 per litre.

In May, the government had increased petrol prices by Rs 5 per litre. The government last increased prices of diesel and cooking gas on June 26 last year, despite global crude strengthening since then. "If all petro product prices are passed on properly, markets will bottom in the next three months and recover significantly thereafter because growth is still there," said Sankaran Naren, chief investment officer, ICICI Prudential Asset Management.

OMCS TO BENEFIT

Shares of oil marketing companies may surge on Monday as the government's decision to increase petroleum product prices will help trim losses that they incur from subsidised sale of oil and cooking gas. Brokers said the step has brought cheer to investors in these companies as they expected a lesser increase in diesel prices and none in kerosene and cooking gas.

Though the three oil marketing companies - Indian Oil Corp (IOC), Bharat Petroleum Corp (BPCL) and Hindustan Petroleum Corp (HPCL) - together will still incur revenue losses from fuel subsidies of Rs 121,000 crore this year, the increase in product prices will reduce their monthly borrowings and improve cash flows.

"Shares of oil marketing companies will rise this week not because the petro price increases will bring these companies back into profits, but that there were very little expectations from the government," said the investment head of a mutual fund owned by a public sector bank. "Also, their valuations are almost at rock bottom because these stocks have hardly seen any movement," he said.

Shares of BPCL and IOC have fallen about 4% so far in 2011 against the 10% fall in the Sensex during the period. HPCL shares, which surged 6% on Friday, have been unchanged since January. BPCL and IOC gained almost 3% each on Friday ahead of the meeting of the government representatives to decide on the prices. Oil marketing companies buy crude at international prices, but sell diesel, kerosene and LPG at subsidised prices fixed by the government.

The government compensates them through a mix of cash subsidies and discounts from oil exploration and production companies, including Oil & Natural Gas Corporation (ONGC) and Oil India. Shares of ONGC and Oil India could also rise on Monday as their share of the overall subsidies will drop after the price increases. "Outlook of upstream companies have been clouded by the ad hoc nature of the subsidy-sharing formula. Lack of concrete subsidy-sharing mechanism has resulted in earnings/valuations of upstream companies being contingent upon government directives," said Enam Securities, in a note prior to the rise in prices.