With Bernanke On The Tight Rope, FOMC Will Expand QE3 In December - Forbes

With Bernanke On The Tight Rope, FOMC Will Expand QE3 In December - Forbes

Central bankers have been flying under the radar ever since the ECB’s Mario Draghi offered Spain and Italy open-ended bond purchases and Fed Chairman Ben Bernanke unveiled a third round of quantitative easing. Working behind the scenes, Bernanke & Co. have been gathered in Washington for two days and on Wednesday delivered their latest policy decision. The FOMC statement revealed it decided to keep the monetary levers in their current position and is in wait-and-see mode until December, as I reported here.
The real action will come in the December meeting, Goldman Sachs’ chief economist Jan Hatzius believes, where he expects QE3 to be expanded to $85 billion a month to make up for the end of Operation Twist, and the possibility of outcome-based rate guidance. Also in Fed watchers’ minds will be the future of Bernanke. A report suggested the Chairman will end his tenure in January 2014, not seeking a third mandate if Barack Obama wins and, would be replaced if Mitt Romney is victorious.