The Federal Reserve is still debating whether or not to embark on a third phase of quantitative easing, shorthand QE3, said William Dudley New York Fed president, a close confidant of Federal Reserve Chairman Ben Bernanke. Dudley believes that the economy’s recovery is still fragile, despite the recent signs of improvement. If not handled properly the recovery could easily putter out.
"Nothing has been decided," he said of QE3, in which the Fed would make large-scale asset purchases in an attempt to lower rates and give the economy another controversial shot of adrenaline.
"It all depends on how the economy evolves," Dudley added. "It's about costs and benefits, and if we get to a point where we think the benefits of another program of QE outweigh the costs, then we'll certainly do so."
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