With Europe Plan in Place, All Eyes Turn to Fed

On the heels of the Eurozone debt — European leaders’ decision to increase their bailout fund to €1 trillion or $1.4 trillion and encourage banks owning Greek debt to accept at 50 percent loss (“haircut”), investor attention turns to the U.S. Federal Reserve’s next move: is a stand-pat stance likely or is quantitative easing, part 3 (QE3) on the way?

Inflation Hawks’ Argument

On one side are the inflation hawks, who argue that the Fed’s quantitative easings — QE, QE2 and Operation Twist — have done little to stimulate end-market demand, called “aggregate demand” by economists, while simultaneously triggering an economic negative: higher inflation.

To read the rest of the article, visit: ibtimes.com | By Joseph Lazzaro, U.S. Editor>>