After Bernanke's testimony on Thursday, expectations that the Fed would do QE3 at its June 20 dropped sharply. The thinking was that Ben was much more reticent than folks had expected.

But Morgan Stanley's Vincent Reinhart -- who previously set odds of QE3 at 80% -- is undeterred.

In a note out today, Reinhart explains why all of the skeptics are wrong.

The investors we talked to pushed back in two directions.

First, why would the Fed rely once more on balance-sheet action, which must surely be subject to diminishing effectiveness? The answer is familiar to anyone who watched armed-service movies of the 1940s. At a critical point, an officer asks, “Is anyone willing to volunteer for a hazardous mission from which you will probably not return?” Everyone takes one step back, except our hapless hero.