The market should be happy that the QE3 is still under discussions rather than in action. It is only signaling recovery of the US economy even amidst fears of an economic debacle. A stimulus package from the Central Bank in the form of quantitative easing is an unconventional monetary policy that is taken when conventional policies become ineffective.  And with postponement of such major decision, it seems that the US economy is showing some signs of revival.  Another round of easing, according to analysts, will only tell the world that the US economy is still in a dire straits and road to recovery might just be difficult as ever.

The FOMC minutes that came last Wednesday again repeated the same old story about bringing a new round of stimulus in the form of QE3 if situation got worse. However, the market yet again got a disappointed sign from the Fed since the stimulus package is to show some real signs. But analysts believe that investors should rather become positive about the delay as another round of QE will only signal panic.  The disappointment was reflected in the global share prices as they turned bearish on 23^rd August, retreating from a week long growth.

James Bullard, Saint Louis Fed President expressed that the FOMC minutes were rather stale which did not indicate true picture of the US economy. According to him, the economy is in fact progressive than what the Fed’s June 31-August 1 meeting had explained which is why they are delaying the next stimulus package. Analysts say that there is a positive sign in the job market which saw the most hiring in five months in July. The global stock market is also seeing an upswing since early June and investments are also expanding. All such signs indicate that the economy is heading north and an unconventional stimulus package in such hour would only make a false statement about the US economy to the rest of the world.