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Bernanke Has ‘Finger On Trigger’ For ‘QE3’

From a hopeful Reuters:

Bernanke has "finger on trigger" for new bond buys

January 26, 2012

CHICAGO/NEW YORK (Reuters) – The Federal Reserve has moved closer to embarking on a new round of its controversial money-pumping after the central bank and its chairman Ben Bernanke highlighted a grim outlook for the U.S. economy.

Bernanke on Wednesday opened the door a bit wider for the Fed to return to buying securities in the months ahead to buttress a weak recovery and keep inflation from slipping too far below its newly adopted 2-percent target.

"It sounds like the finger is on the trigger," said Thomas Simons, a money market economist at Jefferies & Co.

The Fed’s announcement that it was unlikely to raise interest rates until at least late 2014, more than a year beyond its previous guidance, immediately pushed down Treasury bond yields and Bernanke’s comments to the media raised expectations of a further round of so-called quantitative easing, or QE3

is probably going to be the ‘October Surprise’ for this election. Obama is going to start another quantitative easing just in time to get the best stock market numbers before the election. And who cares what this does to the value of the dollar?

Even if the administration doesn’t actually implement a QE3, Bernanke will hint about it strongly enough to get people to buy stocks and drive up the market before November.

It remains to be seen if the potential political backlash proves too daunting.

Backlash from whom? The news media? They will ignore it?

The Republicans? The news media will ignore them, so nobody will hear anything they say, anyway.

Barring an unexpected pick-up in inflation or the U.S. economy suddenly kicking into a higher gear, Bernanke said it was logical that the Fed should look at ways to do more to help.

"The framework makes very clear that we need to be thinking about ways to provide further stimulus if we don’t get improvement in the pace of recovery and a normalization of inflation," he told a quarterly news conference

"Stimulus" has been Bernanke’s code word for quantitate easing in the past.

This article was posted by Steve on Thursday, January 26th, 2012. Comments are currently closed.

4 Responses to “Bernanke Has ‘Finger On Trigger’ For ‘QE3’”

  1. BannedbytheTaliban says:

    Why would there need to be anymore stimulus? The AP just told me about the positive trend in job growth and how strong the recovery has become. Also, MoveOn has this nifty little graft showing how the democrats killed jobs after taking control of the house and senate in 2007 Obama’s policies have turned the tide of the Bush recession.

  2. Petronius says:

    in the hours following Bernanke’s announcement the price of gold shot up $70.

    The Fed action is a form of devaluation of the US dollar.

  3. P. Aaron says:

    People with paper money buying more paper money? Gimmicks, trickery. Buys time, puts off any real solution.

  4. JohnMG says:

    ….”The Republicans? The news media will ignore them, so nobody will hear anything they say, anyway.”….

    Unless, of course, Romney is the candidate and he realizes a HUGE spike in his income. Then it’ll be all over the news.

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