The Federal Reserve says its two-year series of bond buybacks designed to stimulate the economy will end in June as scheduled.
Yet more and more market watchers don't think so any more and are bracing for more such programs known as quantitative easing, currently in a second round due to end June 30.
Under quantitative easing, the Fed buys Treasurys from banks with the aim of pumping money into the economy to spur activity, with the downside being a weaker dollar and heightened inflation concerns.
Yet a weak job market, tepid housing sector and sluggish economic growth continue to reign despite trillions of dollars in help from Congressional spending and quantitative easing programs, currently in a $600 billion second round dubbed by the markets as QE2.
So, talk of QE3 is rising.
|Fed Chair Ben Bernanke
(Getty Images photo)
"The opinion of the market has changed quite a bit just in the last month or so — 30 days ago very few people would have been expecting a QE3 or QE2 1/2-type situation," says Mitchel Schlesinger, managing director at FBB Capital Partners in Bethesda, Md., according to CNBC.
"But the economic data that has come out has been somewhat downbeat since then," Schlesinger says, adding, "there is growing concern that we have hit a pause in the recovery."
The Federal Reserve and Chairman Ben Bernanke has said the central bank will take a look at QE2's results after June before making any decisions on actions to guide the direction of the economy.
"We can afford to wait and see," says James Bullard, president of the St. Louis Federal Reserve Bank, according to Reuters.
"It would be a good time to gather information on the economy and see how things are developing."
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