Morgan Stanley Bond Team Faces the Question: Can Fed Avoid QE4?
- Below-forecast jobs growth sparks talk of quantitative easing
- Traders have been cutting forecasts for Fed rate increases
The Marriner S. Eccles Federal Reserve in Washington, D.C., on, Sept. 1, 2015.
Photographer: Andrew Harrer/BloombergThis article is for subscribers only.
A year that started with almost everyone calling for the Federal Reserve to raise interest rates is drawing to a close with one of the world’s largest bond dealers saying there’s increasing chatter about the need for additional stimulus.
Morgan Stanley, one of the 22 primary dealers that trade directly with the Fed, says its clients began discussing the possibility that central bankers will resume bond purchases -- or cut interest rates to below zero -- after a weaker-than-forecast U.S. employment report last week. The firm recommends buying medium-term Treasuries.