We Are A Long Way From More QE - Or Not?

Fed 'a long way from' new round of QE: Dudley

NEW YORK (Reuters) - New York Federal Reserve President William Dudley on Wednesday said the U.S. central bank is "a long way from" engaging in additional quantitative easing to prop up the economy.

My view:

When a government official or Fed official make the point to address a rumor in a public forum, it tends to add weight that the rumor is indeed true.

While the Fed may in fact raise rates once, it is our view that the market reaction may be so negative that they will reverse course quickly and consider another round of quantitative easing.

A major factor in this decision will be what is occurring globally.  If China continues to slow down, deflationary forces will grow substantially and drag the stock markets down accordingly.