WASH­ING­TON-The Fed­er­al Re­serve ap­pears set to launch a third round of un­con­ven­tion­al mon­e­tary stim­u­lus on Thurs­day while sig­nalling that a weak econ­o­my may war­rant ul­tra-low in­ter­est rates for at least an­oth­er three years. Not every­one be­lieves the Fed will em­bark on an­oth­er bond-buy­ing spree, and plen­ty of doubts re­main about the like­ly ef­fi­ca­cy of such a move. But Fed Chair­man Ben Bernanke has made clear the cen­tral bank will not sit idly by while un­em­ploy­ment, cur­rent­ly at 8.1 per cent, re­mains so far above lev­els con­sis­tent with a healthy eco­nom­ic re­cov­ery. Bernanke's com­ments and dis­ap­point­ing da­ta on the job mar­ket have left many econ­o­mists con­fi­dent the Fed's pol­i­cy-set­ting Fed­er­al Open Mar­ket Com­mit­tee will de­liv­er a third round of quan­ti­ta­tive eas­ing, or QE3. On me­di­an, they see a 60 per cent chance, ac­cord­ing to a Reuters poll.

The FOMC will an­nounce its de­ci­sion at about 12.30 pm EDT (1630 GMT) at the close of a two-day meet­ing. "The mar­ket is firm­ly in the camp that the FOMC will de­liv­er; it's just a ques­tion of how much," said Brad Bech­tel, man­ag­ing di­rec­tor at Faros Trad­ing in Stam­ford, Con­necti­cut. In­deed, the like­ly de­tails of any de­ci­sion to pur­chase bonds-in­clud­ing the size and com­po­si­tion of any new as­set pur­chase plan-are the sub­ject of heat­ed de­bate.

Many econ­o­mists see the Fed lean­ing to­ward an open-end­ed bond-buy­ing pro­gramme that is con­di­tion­al on the path of the econ­o­my, rather than lump-sum amounts with pre-es­tab­lished end dates as done in the past.

This could help car­ry the econ­o­my through the loom­ing risks of a deep­er Eu­ro­pean debt cri­sis and the loom­ing tax break ex­pi­ra­tions and gov­ern­ment spend­ing cuts known as the US fis­cal cliff. Many econ­o­mists be­lieve busi­ness­es have al­ready re­trenched out of fear the econ­o­my could hit the shoals. (Reuters)