The fact that I am not an expert Fed watcher/economist prevents me from having a solid opinion on the size of the QE3; however, I do have some other thoughts and opinions relating to the actions taken.
The continuation of Twist 2, has the intention of artificially creating demand on the longer end of the yield curve, which lower rates on the long end, and the fact that it is a net zero purchase means selling the same dollar amount of shorter term Federal Treasury Bill securities to offset the purchase, thus artificially increasing the borrowing cost at the shorter end. I wonder what the efficacy would be in the third round of QE3 mainly because, in finance, we have a pretty good understanding of the behavior of consumers in terms of mortgage refinancing. There are costs associated with refinancing a mortgage either through your local mortgage broker, or directly with a bank. Such costs inhibit the smooth translation of lowered rate into mortgage refinanced into lowered rate. Thus borrowers do not refinance purely because the rate is lowered, they must gauge the costs and benefits of such refinance. Moreover, rate fluctuates, usually those who qualify to refinance, refinance the first time when rate drops, the subsequent rate drops produce much fewer qualified refinancing candidates, unless the rate drop is substantial and refinancing benefits outweights the costs.