Wall Street analysts are betting both ways on whether or not the U.S. Federal Reserve will announce a new round of bond buying Thursday.
To illustrate how divided Wall Street is on the possibility the Fed could go with a third round of bond-buying -- a program that is already dubbed quantitative easing three or QE3 -- Goldman Sachs analysts say the odds on the Fed taking action are "now above 50 percent," The Wall Street Journal reported Monday.
Chief investment officer at Sica Wealth Management Jeff Sica said Fed Chairman Ben Bernanke "really put his credibility on the line" and has to "do something" not to erode trust in his position.
On the other hand, economists at Noruma Securities are saying the 96,000 jobs added to the economy in August showed the recovery was too strong for the Fed to make a move just now.
Wall Street bets can also be found in the price of gold, which rose 3.1 percent last week, suggesting anticipation of another round of bond-buying is high.
The next puzzle is to figure out how much of an impact a new round of bond buying would have.
The second round of bond buying, announced in November 2010, gave equities an 11 percent boost in anticipation of the news and another 11 percent by the time the $600 billion in purchases were completed in June 2011, the Journal said.
Most Popular Stories
- Schedule packed with talent at the Fox
- Entrepreneurs Chase Social Media
- European Car Sales up First Time in 20 Months
- I never set out to be a role model but it's great to be one ; IN THE HOTSEATBetter known by his stage name Wretch 32, Jermaine Sinclair is a 28-year-old rapper from London. In 2011 his debut album Black and White sold over a million copies and scored three top five singles. His latest single Blackout was released this week
- Austin musicians point to a variety of reasons to appreciate McCartney
- Manila's Hollywood Week
- Promoter McLean 'provided more musical joy than Dylan and Prince combined'
- SINCE YOU ASKED [Pittsburgh Tribune-Review (PA)]
- Financial Times Twitter, Email Hacked
- The Blade, Toledo, Ohio, TK Barger column