QE3 may come in April, says Credit Suisse

Source: BI-ME with Bloomberg , Author: Posted by Bi-ME staff

Posted: Tue January 24, 2012 11:35 am

INTERNATIONAL. The Federal Reserve may implement a third round of quantitative easing this spring to bolster the economy, according to Credit Suisse Group AG’s Ira Jersey.

“We do think the Fed is going to do another round of asset purchases later in the quarter, probably aiming for April,” Jersey, director of U.S. rates strategy at Credit Suisse in New York, said today in a radio interview on “Bloomberg Surveillance” with Tom Keene and Ken Prewitt. “We are growing, we just don’t feel prosperous. It is a part of the job of the Fed to assure prosperity, one of the ways to do that is to kick- start housing,”

The policy-making Federal Open Market Committee meets January 24-25. The central bank is forecast to keep its target for the federal funds rate at zero to 0.25 percent. The target has been at that level since December 2008 and the Fed has pledge to keep it there until mid-2013.

The central bank has purchased US$2.3 trillion of mortgage and government bonds in two rounds of so-called QE. In September, it announced plans to sell US$400 billion of short-term debt and use the proceeds to buy an equal amount of longer- maturity securities, in a program as nicknamed Operation Twist after a similar action in 1961 designed to contain borrowing costs for companies and consumers.