Will the Fed hint at yet another round of QE?

You have to hand it to the Fed. It's a group of great prognosticators.

Early this year, when investors and economists alike believed the economy was pressing down on the accelerator, Federal Reserve Chairman Ben Bernanke and most of his colleagues on the central bank's policymaking group kept any enthusiasm at bay.

Instead, the group refused to alter a pledge to keep interest rates near zero through at least late 2014, a signal that they believed the economy would need the extra boost until then. Only Jeffrey Lacker, president of the Federal Reserve Bank of Richmond in Virginia, worried that prices would jump up if rates remained so low for so long.

Then came May: a stock market swoon, an unmistakable slump in job growth, uneasy consumers and a European debt crisis that won't go away. It turns out the Fed's crystal ball works better than ours.

"There is a huge cloud of uncertainty about what will happen to the U.S. and the global economy over the next six to 12 months," says Bernard Baumohl, chief global economist at The Economic Outlook Group in Princeton, N.J.

As it prepares to meet again this week, the Federal Open Market Committee faces a year that has played out like the previous two, a beginning filled with hopes for an entrenched recovery devolving into days of renewed recession fears.

What can the Fed do?

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