Bank stocks are driving equity markets higher today as a weekend meeting of world financial regulators gave large banks more time than had been expected to increase their capital. This rally in stocks may be short lived; however, as according to a WSJ survey of economists, optimism about the recovery is waning. Three in 5 economists surveyed said they expect that the Fed will eventually embark on additional quantitative easing. This comes on the same weekend that Goldman and Pimco both made headlines with their calls that the Fed will begin a second round of easing by Q1 of 2011. While economists believe this would be the wrong thing to do, clearly these folks are not confident in a continued U.S. economic recovery.
Bonds have improved slightly this morning with mortgage pricing better by approximately .125%.
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