What is the probability that the Federal Reserve will institute more quantitative easing in the near future? Bill Gross of the Pacific Investment Management Company (PIMCO) thinks it will happen soon. We follow his thoughts on the subject with a story about the European Central Bank’s own version of quantitative easing. It was announced last Thursday and had a very positive impact on the stock market. Our third article comments on the positive growth in the U.S. service sector. This is another sign that the U.S. economy is slowly recovering. Finally, we link to a video of PIMCO’s Mohamed A. El-Erian where he discusses recent events in Europe and possible Federal Reserve action.
Bill Gross Thinks The Federal Reserve Will Proceed With More Quantitative Easing – PIMCO’s Bill Gross said that last Friday’s lower than forecast U.S. employment growth will probably bring the Federal Reserve closer to more quantitative easing. http://www.bloomberg.com/news/2012-09-07/gross-says-jobs-growth-to-spur-fed-on-more-quantitative-easing.html
European Central Bank Plans Unlimited Bond Buying To Support The Euro Zone – Last Thursday, the European Central Bank president announced a program allowing unlimited purchases of sovereign bonds from struggling euro zone member states. The plan is similar to the U.S. Federal Reserve’s quantitative easing programs. It should have the effect of boosting equity prices and commodities and keeping interest rates low. http://www.spiegel.de/international/europe/ecb-president-draghi-announces-unlimited-bond-buying-program-a-854374.html
Growth In The U.S. Service Sector Is Faster Than Expected – The Institute for Supply Management said on Thursday that services index jumped to 53.7 last month from 52 the previous month. This is good news for the U.S. economy since such a large portion of our economy is based on services. http://www.cnbc.com/id/48926504
PIMCO’s Chief Investment Officer Summarizes Recent Action By The ECB And U.S. Fed – Here is a short video featuring Mohamed A. El-Erian of PIMCO. He summarizes recent action by the European Central Bank and the possible action by the U.S. Federal Reserve. http://www.bloomberg.com/video/el-erian-jobs-report-triggers-policy-response-need-LaeK6IPhTQKvM4J2IgmNbg.html
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John R. Day and Bill W. Ennis