Calls For Third Round Of Quantitative Easing Grow Larger.
Calls for more stimulus measures are growing louder as the economy begins to look weaker compared to just a few weeks ago. As QE2 comes to an end, the market is falling in tandem and suggestions are coming from major websites, analysts as well as economists that another round of quantitative easing may be necessary to strengthen the U.S. economy. Many economists argued against QE2 yet the market seemed to embrace the impact of easy money and rose for the last few months. Last week we mentioned the possibility that more stimulus measures may be needed to help improve the economy.
A quick search in Google for “QE3″ brings a list of results that show the idea of QE3 is gaining in popularity and momentum as a topic of discussion. President Obama and his administration may be hoping for more stimulus from the Fed if it can help his reelection prospects. The fact that market participants perceive a third round of quantitative easing as possible, is speculative evidence that traders see more bad economic data coming. As more data about the economy is comes in with negative connotations, QE3 discussions could become more prominent and noticeable.