By Ruma Dubey

“While there is life, there is hope”

Profound words and we can see it happening in every facet of our living life – more so in the stock market where every straw is a hope to stay afloat. There is nothing really ‘happening’ and everywhere we turn, there seems to be a scam or disappointment or pessimism.  And the inane human nature which is basically a survivor first, looks for optimism and today, it is QE3.

Tomorrow is a big day in the sense that that morning will have the Q1FY13 GDP numbers coming in and some time later in the night, we will know whether or not the US Fed will go ahead with a QE3. Suddenly, everyone, right from Virar to Rajkot, Gurgaon to Nagarcoil, all seem to be taking about Jackson Hole. With nothing coming forth from our Govt in terms of economic reforms, QE3 has become the new hope; something like a cure for all. But will QE3 happen?

Ben Bernanke is to give a speech on ‘Monetary Policy since the crisis’ and his speech will be cut and dissected, read between the lines and dots, to draw an inference, find a clue which might indicate the coming of QE3 or not. So tomorrow is a meet which will give us some inkling into what Bernanke s thinking and how he probably see’s the road ahead. Jackson Hole is significant because this was the place, two years ago, when at the same place, Bernanke had given his now famous ‘Economic Outlook and Monetary Policy’ speech.

Most say that tomorrow’s meet will not give anything concrete, most certainly not a QE3. The previous meets at Jackson Hole, in 2010 and 2011, were more forward looking and was actually about chalking the path ahead. But this meet, as the title suggests is about the past and he might probably talk about all that was learnt during these two years, the pitfalls and follies and the housing and financial crisis. Interest rates in US are frozen at 0 to 0.25% and inflation is reigned in; so we might hear more about the policy decisions taken by the Fed to reach this juncture. Remember, in August 2010, Bernanke hinted at QE2 but it came in much later in November.

Thus most do not expect Bernanke to announce anything concrete tomorrow but some say that QE3 could come in during the FOMC meet in Sept after the employment figures come in on 7th Sept and the ECB meeting scheduled for 6th Sept.  That again seems like ‘clinging to the straws’ as QE3 happening any time so soon seems difficult.  Maybe, the Fed will once again give a forward rate guidance, extending it till 2015. Goldman expects QE3 to come in by end of 2012 or maybe early 2013.

After Jackson Hole, hopes will float around the ECB meeting next week where Mario Draghi, president of the European Central Bank might announce plans for a bond-buying program to ease borrowing costs, including Spain and Italy.

Thus we will keep on hoping, look towards Draghi and Bernanke to provide impetus to Dalal Street as there is no hope when it comes to our own Chidambaram.