Despite IMF warnings of a global recession in 2013, the U.S. economy could surprise investors with more strength than they expect in this year's fourth quarter, economist Ed Yardeni told more than 300 financial professionals at the second annual Fiduciary Gatekeeper Research Manager Summit in Boston this morning. He said the S&P could reach 1,565.

Yardeni said it was clever of Federal Reserve Board chairman Ben Bernanke to target mortgage-backed securities purchases with QE3 just when the housing market is beginning to turn around. When it does, Bernanke "can take credit for it," he said. "The markets do very well when Bernanke gives us more drugs."

When the Fed stops one of its quantitative easing programs, the markets tend to stall. "Then someone from the Fed Open Mouth Committee says something," Yardeni said.

Yardeni acknowledged that critics may be right and the Fed's great monetary expansion could end badly. "I can't tell you that won't happen," he said.

However, he added that he viewed QE2 largely as a failure. Although it contributed to an increase in equity prices, it also drove up food and energy costs, resulting in a reduction in real disposable income for many Americans.

Yardeni confessed that he was amused by former GE chairman Jack Welch's reaction to last Friday's job numbers. Serious economists, he noted, pay scant attention to the household survey that sent Welch around the bend.

"After his tweet, Jack Welch became an expert on the household survey very fast," Yardeni joked, suggesting the business tycoon immediately hired some sharp assistants to try to bolster his position on what may have been a statistical quirk.

For his part, Yardeni says he pays much closer attention to the revisions of the payroll numbers than the initial payroll figures when they are first announced.

The Fiduciary Gatekeeper Research Manager Summit (FIRMS) is sponsored by Financial Advisor and Private Wealth magazines. The conference attracts research management professionals from financial advisory firms across the United States who meet in small groups with portfolio managers who discuss their strategies and techniques.

-Evan Simonoff