JPM sees 75% chance of more QE by Fed

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Investment banking giant JPMorgan says there is a 75% chance the Federal Reserve will begin another round of quantitative easing by end of this year.

Pavan Wadhwa, head of European interest-rate strategy in at JPMorgan told Bloomberg the Fed may spend "a few hundred billion dollars" to boost to the stuttering US economic recovery. He also says the central bank is likely to keep the official rate on hold until 2012. "The Fed is likely to do more quantitative easing, and that will pull Treasury yields lower," Wadhwa says. "It's hard to argue that these bonds are overvalued when inflation and resource utilisation rates remain very low, and the unemployment rate is high." In its last statement, the FOMC said it would continue to ...

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