Fed cautious about QE3

Bernanke's speech on Aug 26 sparked more speculation about whether US will launch another round of quantitative easing

Ben Bernanke, chairman of the United States Federal Reserve Board, made a speech on the US economic outlook at the annual meeting of the leaders of the world's central banks held in Jackson Hole, Wyoming, on Aug 26. Although, unlike his speech last year, he did not clearly announce the arrival of a new round of quantitative easing (QE3), his words still triggered a rebound on the US stock market.

Looking closely at his speech, we can see that the first priority of the speech was obviously to try and calm the market panic that followed the raising of the US debt ceiling, Standard and Poor's cutting of the US credit rating, and the growing sovereign debt crisis in Europe.