Bernanke further paves the path towards QE3

Fed Chairman Ben Bernanke used his speech at Jackson Hole today to state that unconventional monetary policy does work and that the US needs more of it. It now appears even more likely that at the next FOMC meeting in mid-September the Fed will launch a third round of asset purchases (QE3) and extend its zero interest rate guidance into 2015. But we doubt that QE3 will be any more successful at reviving the economy than QE1 or QE2.