Monday, September 10, 2012

WSJ: UBS expects the Fed to announce QE3 this week

by Calculated Risk on 9/10/2012 02:17:00 PM

On Saturday, I wrote: I expect QE3 on Sept 13th

From the WSJ: UBS: Bernanke Will Unleash QE3 This Week

More and more market prognosticators are calling for the Fed to unveil a third round of quantitative easing this week UBS is the latest to join the fray ...

“We now anticipate an announcement of another round of quantitative easing at the FOMC meeting on Sept. 13,” UBS economists wrote in a note to clients.

The QE3 parameters will likely entail a six-month program of at least $500 billion, primarily focused on buying Treasurys, UBS predicts, while also anticipating the Fed will extend its ultra-low rate guidance into 2015.
The QE3 view isn't unanimous, from the WSJ:
One of the outliers not calling for more Fed stimulus is Nomura Securities. ... The disappointing jobs report “is not weak enough to compel the Fed to deliver anouther round of quantitative easing at next week’s meeting,” Nomura said on Friday.
I think a combination of lengthening the low rate guidance and some sort of Large Scale Asset Purchases (LSAP, aka QE3) is very likely.