Oh, Hello! My name is QE3. I'm on my way! Can't wait to meet you! I am sorry to hear that after a downgrade of the USA's credit rating, you doubted that I would come back for a 3rd try. I guess you don't like my stimulus. Oh well....Toodles!
I don't wait for something to happen and then try to make sense of it. I make sense of it and then expect something to happen. QE3 is coming, and I bet my left testicle on it.
For now, we just have to settle for what people are anticipating, and
why.
“QE3 may be coming after all.”
That opening line from a new CNBC article says it all: experts are now predicting that the country’s economic woes will likely be used to justify a new round of quantitative easing (which is essentially the government printing money to buy its own bonds). It would be the third round in recent memory, hence the name QE3.
“In a dramatic turnabout, market participants now believe the Federal Reserve is more likely than not to resume purchasing assets during the next year in a third round of quantitative easing,” CNBC says regarding its August Fed Survey.
“There is no doubt that over the last week the odds of seeing another round of asset purchases has risen significantly,” Tom Porcelli, chief US economist at RBC Capital Markets, told CNBC. “This doesn’t mean we think it will have any more success than QE2. What this simply reflects is a Fed with few remaining options.”
The survey polled 60 different economists, stock and bond strategists, and portfolio managers
Word of the day: Reverse Repurchase Agreement.
If you’d like to better understand quantitative easing, here is a
tutorial video
