“While the economy is on the mend, markets shouldn’t discount the possibility of the Federal Reserve stepping in with a third round of large-scale bond buybacks from banks to make sure recovery doesn’t lose track, big investors say.
The Fed has twice pumped trillions into the economy buying bonds from banks to ensure price stability and encourage hiring, a stimulus tool known as quantitative easing (QE).
Market talk of a third round has come and gone this year, with calls for it growing when economic indicators disappoint and dismissals when indicators surprise.”
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