CICC, Pimco Say Fed Third Round of Quantitative Easing Unlikely

The Federal Reserve probably won’t have a third round of asset purchases, known as quantitative easing, unless the U.S. economy slips back into recession, said China International Capital Corporation and Pacific Investment Management Co.

“Politically, the bar is very high,” Matthew Nest, senior vice president and head of account management at PIMCO’s Hong Kong office said at a forum in the city today. “From the perspective that we are not facing a deflationary spiral, at least in a near-term, or a double-dip recession,” so further easing is unlikely, he said.

Fed policy makers have tried to spur U.S. economic growth by holding the main interest rate near zero since December 2008 and expanding its balance sheet to $2.79 trillion. Federal Reserve Bank of Dallas President Richard Fisher said yesterday policy makers have “done enough” on stimulus and should focus on price stability.

In the absence of a “second dip” in the economy, the Fed is unlikely to expand its assets purchases, said Aolin Liu, executive director of Beijing-based CICC, referring to additional quantitative easing. The “fear of inflation” is a factor, she said.

Liu and Nest were both speaking at the Asia-Pacific Debt Investor Forum.

To contact the reporter on this story: Fion Li in Hong Kong at

To contact the editor responsible for this story: Sandy Hendry at

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.