Is QE3 Really As Certain As Everyone Thinks?
Almost everyone seems to think the Fed will launch another round of money printing on Thursday, known in more polite circles as “quantitative easing”, but count me amongst the minority who think there’s a pretty good chance all we’ll get is an extension of the low rate pledge and more talk about doing more.
No, the labor market is not good, but it’s not like the nation just lost 300,000+ jobs over the summer, as was the case when QE2 was launched in late-2010, and equity markets are at multi-year highs, rather than moving downward sharply as they were two summers ago before Fed Chief Ben Bernanke made clear at the Jackson Hole confab that another round of money printing was on the way.
A couple of lesser known economic reports from Gallup indicate things aren’t nearly as bad as many believe, first this survey of self-reported consumer spending that just rose to a recovery high.
For what it’s worth, Gallup’s “payroll to population rate” detailed in this survey is now at its highest level since they began tracking it in early-2010 and I can’t help but wonder, given the success the Fed has had keeping equity markets elevated just by talking about more stimulus, why should they stop doing that now when it’s been working so well.