Keizai Group – US Economy May Need Fiscal Stimulus.
“Keizai Group” believes that QE3 would be the wrong prescription for the flagging US economic recovery.
An equity research at “Keizai Group” said, “All QE3 can do is make borrowing cheaper and, frankly, that’s not going to help the millions of unemployed Americans who need to work.”
The firm believes that the Fed will hold off announcing a full-bore round of QE but suggests that President Obama’s address on Labor Day may allude to a new round of fiscal stimulus designed to create jobs working on infrastructure projects like roads and bridges instead.
“The rationale for QE3 is flawed since it can’t make companies hire workers; all it does is end up in equities and commodities which only benefits Wall Street,” said an “Keizai Group” research analyst.
The US Labor Department released data last week which showed that the US economy created zero new jobs in the month of August against consensus expectations for a 68,000 gain. The number prompted fresh fears that the US economy is more likely to re-enter a recession.
“Keizai Group” believes that neither the Federal government nor the Federal Reserve is likely to allow this to happen. “Something will be done; they can’t help themselves,” remarked the analyst.
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