Probability of QE3 Cut to 40% - Nomura
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Analysts at Nomura Securities reduced their outlook regarding the probability of the Fed implementing QE3 in September to 40 percent. The reduction in their outlook comes in response to improving economic data.
"We expect the FOMC will take further steps to stimulate aggregate demand before its current Maturity Extension Program (a.k.a. "Operation Twist") ends in January, but stronger economic data and a short-term moderation of stress in Europe have reduced the chances that the FOMC takes significant action in September," said a research note issued by the bank today.
The bank also believes that business confidence will continue to weigh on hiring and investment in the U.S., and the EU debt crisis and looming "fiscal cliff" will weigh on growth for the rest of the year. Policymakers will act after the election to avert the effects of severe fiscal tightening scheduled to begin in 2013, said analysts.
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"We expect the FOMC will take further steps to stimulate aggregate demand before its current Maturity Extension Program (a.k.a. "Operation Twist") ends in January, but stronger economic data and a short-term moderation of stress in Europe have reduced the chances that the FOMC takes significant action in September," said a research note issued by the bank today.
The bank also believes that business confidence will continue to weigh on hiring and investment in the U.S., and the EU debt crisis and looming "fiscal cliff" will weigh on growth for the rest of the year. Policymakers will act after the election to avert the effects of severe fiscal tightening scheduled to begin in 2013, said analysts.
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