5 Reasons Why QE3 Not as Likely as You Think

If you’re betting that the Fed is about to stimulate the economy in a big way on Thursday, you may be in for a rude awakening.

So says, Stephen Stanley, Pierpont Securities Chief Economist.

Stanley thinks that the QE3 euphoria that’s swept the Street after last Friday's jobs number is misguided. (Bulls believe the lackluster jobs data gives Ben Bernake a reason to act.)

However, Stanley argues that there are many other influences at play and when you add them up, the environment doesn’t warrant Fed action.

1. In the past when the Fed has implemented QE, part of the action has been generated by the Fed’s concern about asset prices. “This time around the market is at a 4-year high.”

2. The case for spurring growth is weak. Except for jobs, most of the recent economic data has been strong, at least relatively.

3. Inflation expectations are quite a bit higher than at other times when the Fed has implement stimulus.

4. The Fed would step on Operation Twist. “They’ve pounded the table that extending Twist was a big deal,” says Stanley.

5. The election plays a role. “The Fed is a campaign issue this year. It would be waving a red flag among conservatives if they do QE now.”

All told, “This time the situation is very different,” Stanley says on CNBC’s Fast Money. "The market expects QE but the signs just aren’t there."

Posted by CNBC's Lee Brodie

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Trader disclosure: On September 12, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Karen Finerman is long AAPL; Karen Finerman is long BAC; Karen Finerman is long BAC CALL SPREADS; Karen Finerman is long WMT; Karen Finerman is long TGT; Karen Finerman is long MSFT; Karen Finerman is long GOOG; Karen Finerman is long COH; Karen Finerman is long SPY; Karen Finerman is long IWM; Karen Finerman is long MDY; Joe Terranova is long VRTS; Joe Terranova is long WFM; Joe Terranova is long SWN; Joe Terranova is long AAPL; Joe Terranova is long QCOM; Joe Terranova is long TRV; Joe Terranova is long VZ; Joe Terranova is long VLO; Joe Terranova is long CSTR; Joe Terranova is long CHKP; Joe Terranova is long EMC; Joe Terranova is long NXPI; Joe Terranova is long AAPL Sept. $655 puts; Joe Terranova is short AAPL Sept. $640 puts; Brian Kelly is long GLD; Brian Kelly is long EWG; Brian Kelly is long DOX FUTURES; Brian Kelly is long CORN; Brian Kelly is long WHEAT; Brian Kelly is long SOY; Brian Kelly is long JJ; Brian Kelly is long GRJA; Brian Kelly is long DBA; Dan Nathan is long AIG Jan 35/40 call spread; Dan Nathan is long MSFT Oct. 30/28 put spread; Dan Nathan is long AAPL Sept./Oct. 700 call spread; Dan Nathan is long GS Sept. 90/80 put spread; Dan Nathan is long SBUX Sept. 47 puts; Dan Nathan is long FB Nov./Jan. 22 call spread

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