Deflationary daze here again... 
"The U.S. economy faces a risk of falling back into recession and the Federal Reserve might need to consider a new round of securities purchases to deal with it, even though it isnât in a strong position to address a slowdown, three former top officials at the central bank said.
In an exclusive interview with the Wall Street Journal, Donald Kohn, Vincent Reinhart and Brian Madigan â the last three directors of the Fedâs powerful monetary affairs division â put the risk of a new economic contraction at between 20% and 40%. Madigan and Kohn said the Fed should consider a third round of bond purchases only if inflation slows from recent elevated levels and if the economy continues to underperform"
http://blogs.wsj.com/economics/2011...ls-signal-support-for-qe3-if-inflation-slows/
"The U.S. economy faces a risk of falling back into recession and the Federal Reserve might need to consider a new round of securities purchases to deal with it, even though it isnât in a strong position to address a slowdown, three former top officials at the central bank said.
In an exclusive interview with the Wall Street Journal, Donald Kohn, Vincent Reinhart and Brian Madigan â the last three directors of the Fedâs powerful monetary affairs division â put the risk of a new economic contraction at between 20% and 40%. Madigan and Kohn said the Fed should consider a third round of bond purchases only if inflation slows from recent elevated levels and if the economy continues to underperform"
http://blogs.wsj.com/economics/2011...ls-signal-support-for-qe3-if-inflation-slows/