Goldman Sachs Group chief economist Jan Hatzius still thinksthe Federal Reserve will initiate another round of quantitative easing this year, but has lowered the odds, he told CNBC Tuesday.
“More likely than not we’ll get another round of easing,” he said, but the “probability of it has come down from well above 50 percent in January,” when Chairman Ben Bernanke said he hadn’t ruled out the possibility.
“They haven’t said anything about that for quite a while so there's a lot of uncertainty,” Hatzius said of a potential third round of easing, or so-called QE3.
He said the recent rise in bond yields is “a reflection of the generally stronger data seen over past few months, and the market built that in to a greater degree. Clearly [rising yields is] a statement by the bond market things are looking better.”