UPDATE 1-Medley says Fed preps quantitative easing - source
(Updates with details, market comment, byline)
By Daniel Bases
NEW YORK, Sept 28 (Reuters) - The U.S. Federal Reserve is
preparing a fresh round of quantitative easing measures to
battle lackluster economic performance, hedge fund advisor
Medley Global Advisors said in a report on Tuesday, a market
source told Reuters.
"Fed leadership has all but run out of patience with
economic data it believes is not propelling the U.S. recovery
sufficiently to dent the unemployment rate. TheFOMC will work
through the next couple of weeks to prepare additional easing
measures to announce at the end of its Nov. 2-3 meeting," the
source said, reading directly from the report.
"The decision will bring an end to market speculation about
QE, or QE2 as it has become known. Policy makers are no longer
willing to wait for the pace to pick up unaided. Unemployment
is just too high," the report said, according to the source.
The Federal Open Market Committee is the U.S. central
bank'smonetary policy-setting body. It next meets for two days
on Nov. 2-3. Investors have been on edge over talk of a second
round of quantitative easing, parsing both economic data and
market chatter because of the potential wide-ranging impact.
"Thedollar definitely was hit by the report, but I think
it was more a compounding of the selling we saw from the pretty
bad consumer (confidence) report," said the source.
"Investors are very sensitive to the data looking for any
clues on whether QE2 is something the Fed is going to bring
back," the source said.
In midday trade, the U.S. dollar was down 0.5 percent to
83.84 yen <JPY=>. The euro climbed 0.91 percent to $1.3576
<EUR=>.
U.S. consumer confidence fell in September to itslowest
since February, underscoring lingering worries about the
strength of the economic recovery. Home prices also fell, the
S&P/Case Shiller composite index of 20 metropolitan areas
showed. For story on data see [ID:nN28177460].
The Fed lastweek said it was prepared to put more money
into the economy if needed to stimulate the recovery and avoid
deflation.
To battle the financial crisis, the Fed has already bought
$1.7 trillion of longer-term Treasury and mortgage-related
bonds,supplementing its pledge to keep benchmark U.S. interest
rates near zero for a long time.
Medley spokeswoman Hannah Little would neither confirm nor
deny the firm had issued the 1-1/2-page report, entitled "Fed:
Bait and Switch", citing the firm's subscription policy.
(Editing by James Dalgleish)
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Keywords: USA FED/MEDLEY
Che messaggio è per il mkt se il QE2 fosse pari o superiore al QE1??? che non c è piu nulla da fare ovviamente