As the Fed gets set to stop QE, Wall Street is already speculating the central bank could crank up a new bond-buying program to take its place if the economy sours.
While the odds aren’t high, Fed watchers, surveyed by CNBC, saw a 1-in-7 chance the central bank would launch another QE program within the next 12 months, but they saw a 1-in-6 chance of a new round of bond buying within two years. They also saw a 15.1 percent chance of a recession in the next year.
“I think at this point, people and economists, have become conditioned, and not incorrectly, that when things turn south that QE is just a part of the toolkit, rather than some sort of unusual policy,” said Daniel Greenhaus, chief global strategist at BTIG. “With interest rates this low, that’s probably not an unfair assumption.”
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