That stands for a third round of quantitative easing or printing money, which is done through central bank bond purchases and is one of those odd mis-phrasings. What printing money does, besides bolster the Fed's portfolio and put pressure on interest rates by accelerating demand for bonds, is dilute the value or the quality of the dollar. Technically, it doesn't ease the quantity of dollars, although it makes dollars cheaper and easier to obtain.
On Wall Street, however, there is the expectation factor to consider and that is generally as palpable as the actual programs. Gold has been jumping in value markedly, for example, well in advance of a Fed announcement just on anticipation alone.
Most of the summer, at one Fed Open Market Committee meeting after another, the price of gold would fall off the curb whenever the Fed failed to announce that QE3 was on its way. Gold traders month to month were caught leaning too far over the rail.
The latest uptick in gold seems more pronounced than usual, if only because Fed Chairman Ben Bernanke's annual speech in Jackson Hole, Wyo., at the bank's annual retreat, adds one more dramatic reminder that QE3 is under consideration.
Since the Fed's July 31-Aug. 1 meeting, gold has climbed 8.3 percent or by $134.40 to Friday's close of $1,7.40.40 per troy once.
If that sounds arbitrary, using a wider scope, gold has risen 24 percent or by about $340 per troy ounce since just after QE2 was announced in November 2010.
Gold represents a self-defeating market prophesy where the anticipation of a cheaper dollar through QE3, which is expected to increase the demand for gold, increases the demand for gold in advance, before QE3 even becomes a reality. So the profit margin is already diluted.
Other commodities priced in U.S. dollars will suffer the same fate this week, tumbling on Thursday if the Fed holds back on QE3 and possibly dropping even if QE3 is announced.
That would be because QE3 the fantasy and QE3 in reality are two different things and it is unlikely the Fed will exceed expectations, which run anywhere between $200 billion and $400 billion in new bond purchases.
For this week, meanwhile, the market will find itself in a paradoxical pattern where bad means good and good means bad.
That is to say disappointing economic data will increase the likelihood that the Fed will act, so disappointing data will push equities higher and favorable data will viewed as a threat.
In international markets the Nikkei 225 index in Japan was flat, dropping 0.03 percent and the Shanghai composite index in China gained 0.5 percent. The Hang Seng index in Hong Kong rose 0.13 percent and the Sensex in India rose 0.47 percent.
The S&P/ASX 200 in Australia added 0.18 percent.
In midday trading in Europe, the FTSE 100 index in Britain was flat, up 0.05 percent while the DAX 30 in Germany was up less than 0.01 percent. The CAC 40 in France fell 0.22 percent and the Stoxx Europe 600 dropped 0.29 percent.