Panic!

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When Richard Fisher says that the Fed is getting awfully close to beginning to end his hated QE3, everyone shrugs their shoulders and says, "the Dallas Fed president is up to it again."

When Chicago Fed chief Charles Evans says the same thing, the reaction is somewhat different.

"We are quite likely to reduce the flow of purchases rate starting later this year - I couldn't tell you exactly which month that will be - and it's likely to wind down over time in a couple or few stages," Charles Evans, president of the Chicago Federal Reserve Bank, told reporters at the regional Fed bank's headquarters.

Asked if he would rule out starting the cutbacks next month, Evans said he "clearly" would not, becoming the third Fed official in two days to suggest a September pullback is on the table.

U.S. stocks were on track for a third consecutive day of losses, as investors hung back after a global selloff on central-bank worries.

The Dow Jones Industrial Average dropped 66 points, or 0.4%, to 15452 in afternoon trading. On Tuesday, the Dow fell 93 points, the biggest decline since June.

The S&P 500-stock index lost seven points, or 0.4%, to 1690, with seven of 10 sectors lower. The Nasdaq Composite Index fell 14 points, or 0.4%, to 3651….

Two Fed officials helped spark the global pullback by saying Tuesday they wouldn't rule out paring back the central bank's easy-money policies as soon as September. Also raising investor expectations for a Fed withdrawal was the Commerce Department's report that the trade deficit narrowed sharply in June, which may provide a boost to economic growth.

Fed may cut bond buys as soon as next month - Evans [Reuters]
Stocks Head for Another Loss [WSJ]
Fisher Says Jobs Data Moves Fed Closer to Scaling Back QE3 [WSJ Real Time Economics blog]

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