Will there be a QE3? | Forex Factory

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Will there be a QE3?

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  • Will the Fed start a QE3?
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  • #1
  • First Post: Aug 28, 2012 3:15am Aug 28, 2012 3:15am
Isn't September traditionally suppose to be a sell off month? So will the Fed initiate QE3 to counter a sell off?
The trend is my friend? The world casino is my friend!
  • #2
  • Aug 28, 2012 5:44am Aug 28, 2012 5:44am
I don't think it's a question of if but when. They are just simply waiting for the opportunity to take the market by surprise.
  • #3
  • Aug 28, 2012 10:34am Aug 28, 2012 10:34am
Quoting CapR
Isn't September traditionally suppose to be a sell off month? So will the Fed initiate QE3 to counter a sell off?
God, what kind of question is that? They try to get the ECONOMY going. Why you think they will even care about what the stock market is doing?

Remember the aims of the FED, if not then please read up on them on the fed's website: controlling inflation and stimulating economy. Anything mentioned about the markets in there? not really...
  • #4
  • Aug 28, 2012 10:36am Aug 28, 2012 10:36am
Quoting itop
I don't think it's a question of if but when. They are just simply waiting for the opportunity to take the market by surprise.
Totally irrelevant for the fed if the market is suprised or not. The QE3 having a positive effect on the economy is the only thing that matters.
  • #5
  • Aug 28, 2012 10:40am Aug 28, 2012 10:40am
US economy recovers slow, but it recovers, it is not needed to habe new QE, but traders like us want QE, because than eu, au, gu, etc move stark.
  • #6
  • Aug 28, 2012 11:07am Aug 28, 2012 11:07am
If risk sentiment turns sour, and there is a sell off in equities - Which looks likely from fundamental and technical views - Then I think there will be more QE. The US has a plan to attempt an export led recovery and for that, a weak dollar will help. In their view: QE = Weaker dollar = more exports = less negative trade balance = higher GDP.

Basically if the dollar starts to rally really hard against the majors - the fed will try to push it down.

At least that is my 2 cents.

LD
  • #7
  • Aug 28, 2012 12:30pm Aug 28, 2012 12:30pm
Guess it sure is nice to be the world's reserve currency.... we print, print, print, and all it does is help us.
  • #8
  • Aug 28, 2012 12:30pm Aug 28, 2012 12:30pm
I think they will have a hard time justifying it if Augusts Job number comes in strong.

In fact since we are bouncing around the highs in US equities already it seems QE3 is already somewhat priced in. Which means shorting stocks into the September Fed meeting is quite a reasonable play since the majority of the risk is to the downside
  • #9
  • Aug 28, 2012 12:57pm Aug 28, 2012 12:57pm
Quoting Price
Guess it sure is nice to be the world's reserve currency.... we print, print, print, and all it does is help us.
It may not do much, but to even have the option shows how much the US still makes the rules.

In the UK we print a ton of money and use it to make sure crack heads can still get high every day.

Woah.... getting a bit too political for FF!
  • #10
  • Edited 11:51pm Aug 30, 2012 9:53pm | Edited 11:51pm
Quoting itop
I don't think it's a question of if but when. They are just simply waiting for the opportunity to take the market by surprise.
topic: http://forexfactory.com/priceshowthread.php?p=5973090
That's absolutely right! they are coming but the question is WHEN?
  • #11
  • Aug 30, 2012 10:14pm Aug 30, 2012 10:14pm
Not before elections, they won't.
  • #12
  • Aug 30, 2012 10:17pm Aug 30, 2012 10:17pm
Quoting Custos
God, what kind of question is that? They try to get the ECONOMY going. Why you think they will even care about what the stock market is doing?
Remember the aims of the FED, if not then please read up on them on the fed's website: controlling inflation and stimulating economy. Anything mentioned about the markets in there? not really...
They do....It's very simple really: The US economy is very dependent on the stock market, it's capitalism....

Ok, sure the fed has stated their 2 mandates: maintaining price stability and bolstering employment, that doesn't mean that they simply do not care where the stock market is. To think so is extremely naive....
  • #13
  • Aug 30, 2012 10:20pm Aug 30, 2012 10:20pm
Quoting Custos
Totally irrelevant for the fed if the market is suprised or not. The QE3 having a positive effect on the economy is the only thing that matters.

Have you ever heard of the Lucas critique? "shock and awe"?

http://en.wikipedia.org/wiki/Lucas_critique
  • #14
  • Aug 30, 2012 11:25pm Aug 30, 2012 11:25pm
No Stimulus in a election year....

No Stimulus, SPX500 made a new high this month...
Stocktwit: LuisCarlos - twitter: @lcparodi
  • #15
  • Aug 30, 2012 11:50pm Aug 30, 2012 11:50pm
Quoting Price
Guess it sure is nice to be the world's reserve currency.... we print, print, print, and all it does is help us.
Haha, that's totally right! Have you read Currency wars? I think this excessive printing is going to harm the US politically at some point, if not this time.
  • #16
  • Aug 31, 2012 8:10am Aug 31, 2012 8:10am
not this month
  • #17
  • Aug 31, 2012 6:13pm Aug 31, 2012 6:13pm
Quoting farazbeigi
not this month
And today is the last day of "this month". Well played sir.

I don't think they will do any such QE3 until after the elections.

my 0.02
  • #18
  • Sep 1, 2012 1:01am Sep 1, 2012 1:01am
Quoting mfoste1
Have you ever heard of the Lucas critique? "shock and awe"?

http://en.wikipedia.org/wiki/Lucas_critique
i cant see how that Lucas Critique is relevent to his statement.

And i think Fed dont want to shock and awe, otherwise how do you justify the stock market at current levels other than antiticipation of QE3 which is fed tiping its hand and why Fed has rate forcast horizon ahead 1-2 years from now?
  • #19
  • Last Post: Sep 1, 2012 7:39am Sep 1, 2012 7:39am
I really don't know why they bother at this point... most of the problem is with the banks and getting them to lend.

You can't have growth without lending. If the banks are more interested in trading high risk securities for high gains what incentive do they have to give out a loan for 4% apr or less?

The fed is really between a rock and a hard place, nothing more than they created themselves. They might get better traction if they raised rates... while this would put the hurt on people taking out loans for cars and such it would entice the banks open up lending on the real estate.
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