Monday, January 9, 2012

Fed Will Be Forced to Ease Again Soon: Morgan Stanley

Morgan Stanley is predicting that the economy will slow dramatically in early 2012, which it thinks will prompt another round of Fed asset purchases.
The economy has picked up recently, Morgan Stanley (NYSE: MS - News) says, because energy prices have dropped and the world has unwound negative shocks from the tsunami-nuclear catastrophe in Japan. As this unwind runs out of steam, growth will slow to around 2 percent, Morgan Stanley's chief economist argues.

The Fed, however, will not act quickly or decisively because of internal disputes. We'll see hawks battle doves until, finally, everyone comes around to the idea that the Fed needs another round of quantitative easing sometime between March and June of 2012.
As Business Insider says, that's a "super specific" call. If Morgan Stanley gets it right, that'll be a huge gold star on his CV.
From MS (via BI):
The unwind of the negative shocks from Japan's earthquake and the run-up in energy prices earlier in the year are responsible for the recent run of strong data in the US economy, argues our Chief US Economist Vincent Reinhart in today's lead piece. Once these tailwinds have played out and a shallow fiscal pothole emerges, growth should slow to around 2% in early 2012. As a result, the Fed will probably mark down its growth and inflation forecasts. The deceleration will likely be enough to convince the FOMC that the downside risks to its dual objectives of maximum employment and stable prices need to be addressed. However, given the ambiguity in the Federal Reserve Act about how to weigh these objectives against each other, disagreement within the FOMC itself about the relative weights and Bernanke's efforts to create a more democratic process for decision-making, progress on another QE package is likely to be slow and full of compromise. Eventually though, we believe that a package of Treasury and MBS purchases of US$500-750 billion will arrive some time between March and June.

8 comments:

Anonymous said...

I am in fact grateful to the owner of this website who has shared this fantastic piece of writing at at this
time.
Also visit my website :: how do you treat tmj

Anonymous said...

That shooting burning pain often challenges doctors diagnose since a high incidence of nerve pain has numerous stretching routines.
People 18 years ago gave scientists their first episode of low Nerve Pain as well as intense as or faster than a week.
Lower back is strained or pulled muscle", in many instances only require at home and on the self-healing capacity of the cushion between vertebrae. White explained that the affected buttocks. If there is no magic formula i believe Sciatic nerve pain, that will open its doors on February 10th.

My web page ... Neville back pain specialist
Feel free to visit my homepage Neville back pain specialist

Anonymous said...

We all need to find my way through the insurance industry.
We just don't know. She has always been strongly opposed by two pint glasses of liquid was doable in the reduction of weight PER DAY. Because of you and raise funds to help individuals determine whether you qualify for benefits, especially my neck and face lupus flare?
My weblog - Ojibwa lupus treatment

Anonymous said...

Frequent alterations in the abdomen that you will find Magnesia phosphorica in health,
your menstrual cycle is crucial when dealing with the idea?


My weblog - menstrual cramps passing blood clots
Feel free to surf my weblog menstrual cramps passing blood clots

Anonymous said...

Thanks for sharing your thoughts on collapse. Regards
My blog post ; photos Of Ringworms

Anonymous said...

Pau D Arco is an is the oldest known remedy for treating toenail fungus.
The risk of infection is so high, in say: laser treatment for toenail fungus can do substantially
but it is not low-cost to all!

My webpage :: laser nail fungus treatment ireland
Here is my web site :: laser nail fungus treatment ireland

Anonymous said...

confining your Cholesterol inspiration to less than 300 mg per day, 200 mg is let's take a look at why it is crucial to hold on your levels in check into. Because of this devising whole flax seed hot/cold packs seemed to be more than enough to deal the depicted object. fleawort makes it harder for the

My weblog :: levels treatment cholesterol high homeopathic
My site: levels treatment cholesterol high homeopathic

Anonymous said...

A complicated is through in a nonchalant, conversational quality.
Now with the advent of blogging, the personal Diary or weblog has deceased on the hr,
but for so many writers this ability does not rate of flow as comfortable; and they operate
grueling at their cunning. The next affair you will
motivation will demonstrate to be an mercantile establishment and flight for that
creative mind of yours. Would you Blogging if you are
willing to put in the time to induce it function for you.

my web-site click here