Barings' Khiem Do has said the chances of the Federal Reserve carrying out QE3 are remote, with economic indicators in the US still "reasonably strong" and by no means justifying further action.

Speaking to Bloomberg ahead of the Fed's Jackson Hole speech tomorrow, the head of multi-asset strategy at Baring Asset Management Asia predicted US GDP growth will be between 1.5% and 2% in the next six to 12 months, no where near weak enough for the Fed to look at further quantitative easing.

"QE3 is like Alice In Wonderland at the moment," Do said.

"The Fed is watching non-farm payroll numbers, which have been OK, as well as unemployment claims and the housing sector, which are both reasonably strong. I do not think these numbers will get them to implement QE3."

Despite previous calls for QE3 from market participants, Do said markets were now coming round to the view there would be no more stimulus any time soon.

"We see this in bond yields and equities falling and some commodity prices have started to ease off," he said.

However, he said Fed chief Ben Bernanke is likely to continue his QE rhetoric, in order to support markets.

"I think Bernanke will say some nice things like he has said in the past, for example that should the economy get into trouble, the Fed are there to help. But we do not want that to happen, we do not want a weak US economy over the next few months."

Do added that the volatility index, the VIX, is very low as equity markets have been "rejoicing" following the positive statements from the Fed and also the ECB.

"However, we do not usually make money when the VIX is so low. A better level to buy at would be when the VIX hits 20-30," he added.