Goldman Sachs: QE3 Much More Likely
CNBC is reporting that Goldman Sachs has adjusted its previous position, and has prepared for QE to resume sometime this year.
"We now see a greater chance that the FOMC (Federal Open Market Committee) will resume quantitative easing later this year or in early 2012. We've changed our call because the committee's reaction to incoming economic data is more dovish than previously thought," Jan Hatzius, chief U.S. economist Goldman Sachs said in a note.
Hatzius went on to say that Goldman Sachs puts the risk of recession around one in three. It that does become the case, then that's when we'd likey see a new, more intense easing program.
"The most likely route to be deployed initially by the Fed would be 'conventional' QE but it could be even more aggressive such as rate caps or interventions in non-government securities market," Hatzius said.
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