The unintended consequences of QE3?

Apollo Multi Asset's Tom McGrath considers the possible unintended consequences of Fed chief Ben Bernanke unleashing a third round of quantitative easing at the upcoming meeting.

'The Ben Bernanke'* is caught between a rock and a hard place. The US economy is hitting stall speed as job growth remains sluggish at best, with corporates and consumers seeming reluctant to spend with uncertainty over the expiry of many Bush/Obama tax breaks next year. If QE3 does not materialise, markets could take a jolt, further undermining the feel good factor the Fed needs to get people spending and the economy motoring again. However, with the effects of QE becoming weaker with every successive round, Bernanke may be very reluctant to pull the trigger at this moment in time, g...