Monday, August 1, 2011

JP Morgan: QE3 possible in the US

Analysts warn that the US economy risks falling in another recession.

American GDP gained 1.3% in the second quarter on the annual basis, while the first quarter figures were revised down to 0.4% that is the lowest level since the recovery began in June 2009.

The Q2 GDP accounted for $13.27 trillion that is lower than $13.33 trillion peak in the final quarter of 2007. It’s necessary to note that the recession data has been so far revised down by 25%: according to the latest figures, during the period from the fourth quarter of 2007 to the second quarter of 2009 US economy contracted by 5.1%, while the previously reported reading showed 4.1% drop.

The experts see the future outlook for America as rather dim. Economists at Deutsche Bank lowered the forecast for the third quarter from 3.5% to 2.5% and from 4.3% to 3 for Q4. Barclays Capital decreased estimates for the third quarter and the following five by a percentage point.

Analysts at BNP Paribas and JP Morgan believe that the slowdown may make the Federal Reserve consider the possibility of the third round of quantitative easing. Strategists at Societe Generale think that the greenback won’t be able to gain much in the current conditions.

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