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CL Redux
- Thread starter schizo
- Start date
Markets bummed by lack of Fed hand-holding
http://blogs.marketwatch.com/capitolreport/2013/10/30/markets-bummed-by-lack-of-fed-hand-holding/
Markets seemed blue after the Federal Reserve statement was released Wednesday with both stocks and bonds falling.
<b>And not because of what the Fed said. But by what they omitted</b>, economists said.
<b>The market wanted to hear the Fed was uncertain.</b> And that the government shutdown would damage the recovery.
If those things had been said, the market would have concluded that a taper was off the table in December.<b> Instead, the central bank held firm that it would decide at every meeting.
âTo the extent the market was looking for an excuse to completely pare the odds of a December taper, todayâs policy announcement proffered no such excuse. Guess what folks⦠itâs still data dependent,â said Michael Gregory, senior economist at BMO Capital Markets.</b>
Many economists, including Gregory of BMO, still think the central bank will wait until March 2014. They note that the fiscal-policy follies continue in Washington, with a Jan. 15 deadline for government funding to run out and another one on Feb. 7 for a debt ceiling increase.
The March meeting is also likely to be the first under the leadership of Fed vice-chair Janet Yellen.
âWho better than a market-perceived policy dove to sell the âtapering is not tighteningâ message,ââ Gregory asked.
http://blogs.marketwatch.com/capitolreport/2013/10/30/markets-bummed-by-lack-of-fed-hand-holding/
Markets seemed blue after the Federal Reserve statement was released Wednesday with both stocks and bonds falling.
<b>And not because of what the Fed said. But by what they omitted</b>, economists said.
<b>The market wanted to hear the Fed was uncertain.</b> And that the government shutdown would damage the recovery.
If those things had been said, the market would have concluded that a taper was off the table in December.<b> Instead, the central bank held firm that it would decide at every meeting.
âTo the extent the market was looking for an excuse to completely pare the odds of a December taper, todayâs policy announcement proffered no such excuse. Guess what folks⦠itâs still data dependent,â said Michael Gregory, senior economist at BMO Capital Markets.</b>
Many economists, including Gregory of BMO, still think the central bank will wait until March 2014. They note that the fiscal-policy follies continue in Washington, with a Jan. 15 deadline for government funding to run out and another one on Feb. 7 for a debt ceiling increase.
The March meeting is also likely to be the first under the leadership of Fed vice-chair Janet Yellen.
âWho better than a market-perceived policy dove to sell the âtapering is not tighteningâ message,ââ Gregory asked.
Looking for the lows at 95.90 to possibly fail today and will be selling a reasonable pullback.
Nice trades by the guys that were short.
Nice trades by the guys that were short.
<b>Three Takeaways on the Fedâs Policy Statement â December Taper Not Off the Table</b>
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http://blogs.wsj.com/economics/2013...-policy-statement/?mod=WSJ_hps_LEFTTopStories
The Federal Reserve emerged from its October meeting effectively in a wait-and-see mode on the economy and policy, making few substantive changes to its statement.
Here are a few key takeaways:
<b>âLITTLE CHANGE IN THE ASSESSMENT OF THE ECONOMY:</b> The housing sector has âslowed somewhat,â the Fed said. Thatâs a downgrade from September when officials said it had been strengthening. The labor market had shown âsome further improvement,â the Fed said, an ever-so-slight downgrade from the âfurther improvementâ the Fed noted in September. On net, very little change in how officials see the economy performing.
<b>âFINANCIAL CONDITIONS IMPROVING: </b>The Fed dropped its reference to financial conditions having tightened in recent months, as it noted in September. Thatâs a nod of approval to rising stock prices and the recent drop in long-term interest rates. The Fed also removed a reference to its concern about higher mortgage rates, which have dropped since the last meeting.
<b>âSTILL AN EYE ON TAPERING: </b>The Fed retained language it used in September which suggested officials had an eye on pulling back from their bond buying program if the economy improved. It noted âunderlying strengthâ in the broader economy and said it chose to âawait more evidenceâ on the economyâs performance before adjusting the bond-buying program.
Taken together, the Fed isnât taking a December adjustment to the bond-buying program off the table. But that comes with the strong caveat that it depends on whether the economy is living up to its expectations. <b>As part of that assessment, Fed officials will be updating their economic forecasts in December </b>and will need to make a judgment about whether their projection of accelerating economic growth in 2014 is likely to be met.
-----------------------------------------------
http://blogs.wsj.com/economics/2013...-policy-statement/?mod=WSJ_hps_LEFTTopStories
The Federal Reserve emerged from its October meeting effectively in a wait-and-see mode on the economy and policy, making few substantive changes to its statement.
Here are a few key takeaways:
<b>âLITTLE CHANGE IN THE ASSESSMENT OF THE ECONOMY:</b> The housing sector has âslowed somewhat,â the Fed said. Thatâs a downgrade from September when officials said it had been strengthening. The labor market had shown âsome further improvement,â the Fed said, an ever-so-slight downgrade from the âfurther improvementâ the Fed noted in September. On net, very little change in how officials see the economy performing.
<b>âFINANCIAL CONDITIONS IMPROVING: </b>The Fed dropped its reference to financial conditions having tightened in recent months, as it noted in September. Thatâs a nod of approval to rising stock prices and the recent drop in long-term interest rates. The Fed also removed a reference to its concern about higher mortgage rates, which have dropped since the last meeting.
<b>âSTILL AN EYE ON TAPERING: </b>The Fed retained language it used in September which suggested officials had an eye on pulling back from their bond buying program if the economy improved. It noted âunderlying strengthâ in the broader economy and said it chose to âawait more evidenceâ on the economyâs performance before adjusting the bond-buying program.
Taken together, the Fed isnât taking a December adjustment to the bond-buying program off the table. But that comes with the strong caveat that it depends on whether the economy is living up to its expectations. <b>As part of that assessment, Fed officials will be updating their economic forecasts in December </b>and will need to make a judgment about whether their projection of accelerating economic growth in 2014 is likely to be met.
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