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Williams: Yes On QE3

A few weeks ago I visited the Los Angeles branch of the San Francisco Federal Reserve, toured its monetary operations, and engaged in a discussion about the potential of another round of quantitative easing with some of the branch's senior executives. Their response: please check the official press releases on the Federal Reserve website.

Well now I know their official position, or at least their president's official position on a third round of quantitative easing. Recently, John Williams, president of the San Francisco Federal Reserve and a voting member of the Federal Open Market Committee, stated that in his view, a third round of quantitative easing is warranted. He noted that "it seems like if we have the tools to move us faster toward our goals, we should use them" and declared that although the hurdle to initiate QE3 is relatively high, "we have reached that hurdle."

Williams' opinion is all the more important considering that, according to SFGate, he had opposed QE3 as early as May. His change of heart is a potential indication of a broader change in mindset of FOMC members as new evidence of weakness in the U.S. economy continues to come out.