Investors have prepared for the Federal Open Market Committee (FOMC) meeting today and tomorrow to end with the announcement of a third round of quantitative easing (QE3) - and that's a good bet to make.
Today's Fed meeting will likely end with more of the same information we've been hearing for months from U.S. Federal Reserve Chairman Ben Bernanke. It's been a year and a half since Bernanke first announced that short-term interest rates would remain near zero "for an extended period." That language will likely stay the same tomorrow, and the policy timelines could be drawn out even longer.
There is also no doubt that QE3 or some other meaningful economic stimulus measure is on its way.
Maury Harris, an analyst with UBS, declared in a recent note to clients that, "We now anticipate an announcement of another round of quantitative easing at the FOMC meeting on September 13th. We expect the easing will take the form of a six-month program of at least $500 billion, primarily focused on Treasuries."
Harris also added that, "We also expect the FOMC extends their rate guidance into 2015."
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2012 us economy
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Fed Meeting Today: Are You Ready for QE3?
QE3 Risks: Why this Harvard Economist Fears More Stimulus
High U.S. unemployment and slowing economic growth have stoked hopes of a third round of quantitative easing, or QE3, from the U.S. Federal Reserve. Fed Chairman Ben Bernanke hinted that more was on the way - although failed to indicate when - in a speech Friday at the Jackson Hole, WY, economic symposium.
Bernanke repeated the Fed's recent stance that current economic conditions are still "obviously far from satisfactory" and more help would be coming "as needed."
Interest rates remain near zero, but the Fed maintains that it still has plenty of ammo in its arsenal to boost the economy. The Fed apparently doesn't want to do too little now while the economy faces high unemployment and some inflationary pressure.
On the other hand, doing too much could - if Fed policies interfere with Congress' ability to act down the road -lead to a backlash against the Fed's power.
And the farther the Fed goes with monetary stimulus measures, the deeper that problem becomes.
That's why Harvard economist Martin Feldstein is afraid of QE3. He thinks adding to the billions of dollars already committed to quantitative easing programs will hurt us more than it helps.
Bernanke repeated the Fed's recent stance that current economic conditions are still "obviously far from satisfactory" and more help would be coming "as needed."
Interest rates remain near zero, but the Fed maintains that it still has plenty of ammo in its arsenal to boost the economy. The Fed apparently doesn't want to do too little now while the economy faces high unemployment and some inflationary pressure.
On the other hand, doing too much could - if Fed policies interfere with Congress' ability to act down the road -lead to a backlash against the Fed's power.
And the farther the Fed goes with monetary stimulus measures, the deeper that problem becomes.
That's why Harvard economist Martin Feldstein is afraid of QE3. He thinks adding to the billions of dollars already committed to quantitative easing programs will hurt us more than it helps.
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U.S. Economy 2012: What's Ahead for Debt, Banks, and Stocks
In addition to monitoring Wall Street's latest tales of greed, Money Morning Capital Waves Strategist Shah Gilani has been following how the Eurozone's sovereign debt mess will affect the U.S. economy in 2012.
Shah explained last month how the Eurozone was involved in a game of "chicken" that could wreak havoc on the region's bankers.
"Germany has basically said to Greece, we aren't going to ease up on the austerity requirements imposed on you so you could get more money from all of us, so, if you think that by electing a left-wing group of groupies who are campaigning on easing your burdens by leaning on us, your fed-up creditors, go lean on Atlantis instead, cause that's where you'll end up... underwater, and lost," wrote Shah.
"The Greek politicians - at least the lefties throwing curveballs - think there's no way the Germans will let them exit the currency zone, and of course don't want them to exit the European Union," Shah continued. "They are saying to the population, elect us, we'll spit on their boots and they'll bend over to shine them themselves. And, in the end, we the people will prevail."
Shah's take on the Eurozone debt crisis caught the attention of Steve Pomeranz, a renowned financial advisor and investor advocate based in southeast Florida.
Steve's not only a subscriber to Shah's free newsletter, Wall Street Insights & Indictments, but he also hosts the "On the Money!" radio show.
The "On the Money!" radio show is a weekly program dedicated "to protect you from self-serving forces within the financial services industry."
Pomeranz interviewed Shah earlier this week to discuss more of what's going on in Europe, and what will happen in the U.S. economy in 2012. Shah and Steve discussed the "extend and pretend" game being played in Europe and at home.
"There is no easy resolution to the fiscal problems of these nations, including the United States," Shah told Steve.
Shah said there's one thing right now nations can do to stabilize financial institutions - but even that option is a "dangerous game." Shah detailed how nations' plans to deal with debt are intended to help banks, and how they will actually play out.
He explained how these issues will play into the course of the U.S. economy in 2012.
Shah also analyzed the following hot topics:
Shah explained last month how the Eurozone was involved in a game of "chicken" that could wreak havoc on the region's bankers.
"Germany has basically said to Greece, we aren't going to ease up on the austerity requirements imposed on you so you could get more money from all of us, so, if you think that by electing a left-wing group of groupies who are campaigning on easing your burdens by leaning on us, your fed-up creditors, go lean on Atlantis instead, cause that's where you'll end up... underwater, and lost," wrote Shah.
"The Greek politicians - at least the lefties throwing curveballs - think there's no way the Germans will let them exit the currency zone, and of course don't want them to exit the European Union," Shah continued. "They are saying to the population, elect us, we'll spit on their boots and they'll bend over to shine them themselves. And, in the end, we the people will prevail."
Shah's take on the Eurozone debt crisis caught the attention of Steve Pomeranz, a renowned financial advisor and investor advocate based in southeast Florida.
Steve's not only a subscriber to Shah's free newsletter, Wall Street Insights & Indictments, but he also hosts the "On the Money!" radio show.
The "On the Money!" radio show is a weekly program dedicated "to protect you from self-serving forces within the financial services industry."
Pomeranz interviewed Shah earlier this week to discuss more of what's going on in Europe, and what will happen in the U.S. economy in 2012. Shah and Steve discussed the "extend and pretend" game being played in Europe and at home.
"There is no easy resolution to the fiscal problems of these nations, including the United States," Shah told Steve.
Shah said there's one thing right now nations can do to stabilize financial institutions - but even that option is a "dangerous game." Shah detailed how nations' plans to deal with debt are intended to help banks, and how they will actually play out.
He explained how these issues will play into the course of the U.S. economy in 2012.
Shah also analyzed the following hot topics:
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