Why QE3 is like 'Alice in Wonderland'

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...