Markets fall, “QE4 by year-end”

Markets fell on Tuesday.

The S&P 500 fell 0.1 percent, the STOXX Europe 600 fell 0.3 percent and the Nikkei 225 fell 0.1 percent.

The Federal Reserve kicked off its two-day monetary policy meeting on Tuesday where it is expected to hold steady on interest rates.

“The question will be how dovish is the ‘hold’ that the Fed will deliver tomorrow,” said Jim McDonald, chief investment strategist at Northern Trust.

While not much is expected from the Fed now, Zoltan Pozsar, Credit Suisse’s managing director for investment strategy and research, has suggested that the Fed will be launching another round of quantitative easing in the next few weeks.

“If we’re right about funding stresses, the Fed will be doing ‘QE4’ by year-end,” Pozsar wrote in a note to clients. “The Fed’s liquidity operations have not been sufficient to relax the constraints banks will face in the upcoming year-end turn.”