Fed Buying Doesn’t Depend on Data, Morgan Stanley’s Peters Says

The Federal Reserve is likely to start a new round of bond buying whether or not the U.S. economy continues to show signs of strength, according to Morgan Stanley (MS)’s Gregory Peters.

“We think QE3 in the U.S. isn’t data-dependent,” Peters, the New York-based bank’s global head of fixed-income research, said today in an interview on Bloomberg Television’s “InBusiness With Margaret Brennan,” referring to a third round of quantitative easing.

The central bank has purchased $2.3 trillion of debt in two rounds of bond buying known as QE1 and QE2 as it seeks to encourage investment in the world’s biggest economy. The Fed is likely to buy Treasuries and mortgage bonds in the next round of easing, Peters said.

The European Central Bank may also begin a bond-buying program, Peters said. “There’s a full-blown credit crunch in Europe,” he said.

To contact the reporters on this story: Zeke Faux in New York at zfaux@bloomberg.net; Margaret Brennan in New York at mbrennan25@bloomberg.net

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net.

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