Economists Expect Fed's QE2 Move Wednesday
Nearly 100 percent of economists and fixed-income and equity fund managers expect the Federal Reserve to announce on Wednesday a large amount in quantitative easing (QE) to boost the economy, according to a CNBC survey.
This will likely happen at the conclusion of the Fed's two-day meeting that ends on Wednesday.
But emotions are running high on both sides of the debate, and the amounts have varied from a high of $500 billion, on average, to lower amounts.
“QE2 is a reckless policy that policy that produces risks that far outweigh potential rewards,” wrote former Cleveland Fed President Lee Hoskins. Hoskins’s forecast is right on the average with an estimate of a $500 billion QE announcement.
Drew Mattus of UBS is looking for a $200 billion announcement this month. He wrote that a QE2 announcement will be “open-ended’ and any amount will represent a “down payment.”