Competition time.
Who said the following at an investor Q&A on Tuesday?
Our view remains that the Federal Open Market Committee (FOMC) will once again ease monetary policy via unconventional measures in late 2010 or early 2011. Our views have not changed, and today’s comment discusses them in Q&A form. We believe that purchases of US Treasury securities cumulating to $1 trillion or more are the most likely cornerstone of the program; that the September 21 FOMC meeting is probably too early for a big announcement, but that November 2-3 is a possibility; and that it would likely “work” to a limited degree, perhaps boosting real GDP growth by a little under ½ percentage point per $1 trillion in purchases.
Give up?
OK then it’s this man.
That’s Goldman’s chief US economist Jan Hatzius who is like a dog with a bone when it comes to QE2.
For example, in spite of the recent improvement in US economic data he still believes the QE2 could set sail as soon as November:
Q: Can you be more specific about the timetable for the big QE2 announcement? When will it happen?
A: There are five FOMC meetings between now and the end of the first quarter. A significant announcement at next week’s meeting seems unlikely to us. Given the starting point for the FOMC’s economic forecast—more optimistic on growth and higher on inflation than our own—and the somewhat better-than-expected data over the past few weeks, we do not believe that either of the two criteria spelled out by Bernanke at Jackson Hole—a “deviation from price stability in the downward direction” or a “significant weakening of the economic outlook”—has been met yet.
However, a move could occur at any of the subsequent meetings, but it will very much depend on the data and the implications of the data on the Fed’s forecasts. In particular, a move at the November 2-3 meeting is a possibility if the data warrant it, despite the fact that the FOMC statement will be released less than 24 hours after the polls close for the midterm congressional elections. Historically, there is not much evidence that midterm elections have much impact on the timing of monetary policy announcements, especially on the side of easier policy. For example, the FOMC cut the funds rate by 50 basis points on November 6, 2002, a day after the midterm elections.
Plus ça change.
More on this subject in the usual place.
Related Links:
Goldman urges the Fed to take the big bang option – FT Alphaville
Goldman still expects a further $1 trillion of QE – FT Alphaville
These are the voyages of the starship QE2 – FT Alphaville
Goldman anticipates QE2 dollar weakness – FT Alphaville