Tags: Jeremy | Siegel | Fed | Needs | Launch | QE3

Jeremy Siegel: Fed Needs to Launch QE3

Tuesday, 28 Jun 2011 08:27 AM

Economist Jeremy Siegel says that, unless the economy wakes up very soon, the Federal Reserve needs to do a third round of quantitative easing.

"The question is has QE2 failed or not," Siegel tells moneycontrol.com. “He (Bernanke) will say no, probably saying there has been some pickup and we expect the slowdown to be temporary."

"He may even say that it would have been much worse if we had not done QE2."

However, there is hope on the market that Bernanke will open the door, saying we do have policy measures that can still be pursued if this slowdown gets worse, says Siegel.

ben200gettypress.jpg
Fed Chair Ben Bernanke
(Getty Images photo)
"How he answers those questions and there certainly will be those questions about if this slowdown gets worse what can you do? That’s going to be a key to market response."

Siegel says he was one of the few economists who was very supportive of QE2 and believed that was the right thing to do, but also thinks a QE3 decision is premature at this point.

“The Fed is pretty much with private forecasters that this slow patch is temporary,” says Siegel. “If we do not see a significant pickup in the third quarter then they must seriously consider and QE3 has to be on the table.”

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Forbes reports that Fed Chairman Ben Bernanke said the timing of the International Energy Agency’s decision to release 60 million barrels of strategic oil reserves appeared to be deliberate, coming one day after the Fed confirmed it will not undertake a third round of quantitative easing.

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Economist Jeremy Siegel says that, unless the economy wakes up very soon, the Federal Reserve needs to do a third round of quantitative easing. The question is has QE2 failed or not, Siegel tells moneycontrol.com. He (Bernanke) will say no, probably saying there has...
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2011-27-28
 

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