While the Federal Reserve did not launch a third round of quantitative easing (QE3) at last week’s FOMC meeting, another money printing program could arrive soon under a variety of scenarios – according to Atlanta Fed President Dennis Lockhart.
In an interview last evening with Nightly Business Report, Lockhart characterized the U.S. economy as in “a bit of a slowdown” currently, but added that “I don’t think the conditions have developed that require us to bring out bigger guns quite yet.”
Lockhart went on to say that he would support QE3 under the following three scenarios:
- if the unemployment rate resumed an upward trend
- if the economy were to officially enter a recession
- if deflation became a more significant threat
However, he noted that none of the three scenarios are part of his “baseline” outlook for the economy at the present time.
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