When is qe3 expected

That's FAR more important and impactful than anything the Fed could do right now. Easing in December will be much more palatable, and the Fed will also have more clarity as to how the fiscal cliff will be resolved. It assumes that the base case is No More Easing. Joe is basically looking for the recent data to provide a compelling case for further easing. That's also what Nomura is doing when it says that the data doesn't show job growth falling off the cliff.

The problem with this assumption is that we know that the base case is quite different. Here's what the Fed said in the August FOMC minutes: "Many members judged that additional monetary accommodation would likely be warranted fairly soon unless incoming information pointed to a substantial and sustainable strengthening in the pace of the economic recovery. In other words, the Fed is no longer looking for data to justify further easing. That was the story last spring. Now the Fed is checking the data to see if the data undermines the already established case for further monetary accommodation.

Read more :. If you read the BI bullet points above through that lens, the situation changes altogether. Nothing in the data provides any reason to think that we have a "substantial and sustainable strengthening in the pace of the economic recovery. The completion date remains unknown, as the Fed will reevaluate the strength of the economy during the next several months.

The Fed is moving quickly; purchases commenced Sept. In the interim, the Fed will proceed with its current policy known as Operation Twist. Previously, the Fed had planned for rates to remain low until late New construction and home prices have already started picking up recently, and should mortgage rates fall further , that could fuel a quicker housing recovery.

The QE3 move comes after Bernanke has repeatedly urged Congress to do more to support the recovery in the short term, while still addressing the country's debt problem over the long term. But Congress has done little to heed his advice, and given it's an election year, they're not expected to act anytime soon.

Economists often cite the threat of fiscal cliff as one of the key reasons businesses remain reluctant to hire new workers. The Fed may have acted Thursday, partly to offset the drag from fiscal policy. In implementing QE3, the central bank does not use taxpayer money to buy bonds. Rather, it expands the U. He objected against the forecast and QE3. He has dissented at every Fed meeting since January. Bernanke's QE3 announcement in 90 secs. Personal Finance. The Motley Fool Paid Partner.

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