More talk of QE3 today.
Third Time's a Charm? Whispers of QE3 Emerge
"The U.S. economy is hitting the brakes at exactly the wrong time for the Federal Reserve," said Douglas Borthwick, managing director at Faros Trading in Stamford, Connecticut.
"With the expected end of QE2 within reach, the U.S. economy is in a situation where its only form of life support is about to be ripped away from it."
They also fear the unknown. No matter how much confidence they publicly express about their ability to withdraw the unprecedented monetary stimulus provided during the crisis, many have expressed trepidation about the size of the central bank's balance sheet, now a record $2.76 trillion.
The latest one-two punch came from reports on Wednesday showing both a sharp deceleration in private sector hiring and a slowdown in manufacturing.
Most Fed watchers still see a third round of quantitative easing, or QE3, as a very remote possibility. The obstacles this time around are greater, since inflation has been creeping higher and the jobless rate, while still at an elevated 9 percent, has come down quite a bit in recent months.
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