CL Redux
- Thread starter schizo
- Start date
we're boxed in by two f/u candles, fwiw.
Forgot about those guys.
The Fed
April 27, 2011, 12:38 p.m. EDT
Fed holds rates, bond-buy plan ahead of conference
By Greg Robb, MarketWatch
WASHINGTON (MarketWatch) â The Federal Reserve on Wednesday left its key interest rates at historically low levels and stuck to its $600 billion bond buying program ahead of a key press conference to set the stage on future policy.
The Fedâs Federal Open Market Committee kept rates at a target range of 0% to 0.25% and said its $600 billion bond-buying program would end as scheduled on June 30.
The worries at the central bank seemed to tilt toward prices over growth. Inflation has picked up and the Fed now says the economic recovery is proceeding at âa moderate pace,â but the central bank still said the inflation pickup will be temporary and the jobs market is still a concern. The Fed took out language about the economy being on a âfirmer footing.â
The decisions were widely expected.
The FOMC made only few changes to the language of the policy statement it issued in March and did not give guidance on the outlook of policy after the end of quantitative easing. The FOMC repeated that rates are likely to stay low for an âextended period.â
The Fed gave itself flexibility by adding that it would âadjustâ its holdings of Treasurys and mortgage-backed securities as needed.
Attention now turns to Fed chairman Ben Bernankeâs first-ever news conference scheduled to begin at 2:15 p.m. Eastern. The Fed will also release its updated economic forecasts for 2011 and 2012 just before the press conference begins.
Economists said the Fed has frozen policy until it has a better sense of the impact of the supply shock on the economy from higher oil prices.
Gasoline prices have risen 27% so far this year to an average of $3.88 nationwide.
Economists say that higher prices at the pump dampens growth because consumers have less discretionary income to spend but also can boost inflation. It is still unclear which of these two factors will dominate.
âI think this meeting was a placeholder,â said Ethan Harris, economist at Bank of America/Merrill Lynch.
Confronted with uncertainty about the economy, âthe natural tendency at the Fed is to hesitate and look for more information,â Harris said.
After strong growth in the last three months of 2010, there are fresh signs that the economy is starting to wobble.
Economists are forecasting growth at a 1.7% rate in the first quarter, about half the rate of the prior quarter.
In addition to high gas prices, the list of worries is long including weakness in European peripheral countries, the large Federal budget deficit and the impact of Japan shutting down its economy in the wake of the earthquake, tsunami and nuclear accident.
âAll these things add a bit of uncertainty,â Harris said.
At the same time, consumer prices have been moving higher. Consumer prices rose 2.7% over the last year in March, the largest gain since December 2009.
Bernanke and his key allies have said that they expect the impact from commodity prices on inflation to be transitory.
The index for consumer prices, less food and energy prices, which some on the Fed say is a better guide for future inflation trends is up 1.2% over the past year, up from a low of 0.6% seen in October.
Economists expect the Fed to begin taking baby steps toward an exit over the second half of the year with the first rate hike not coming until 2012.
A center of attention going forward is whether the Fed will freeze its balance sheet in place by reinvesting maturing mortgage-backed securities in Treasurys.
Economists at Goldman Sachs estimate that the reinvestment amount in the second half of the year will be about $20 billion per month, a small fraction of the $80 billion per month rate under QE2.
Many Fed watchers say ending the reinvestment will be a small tightening step and immediately put markets on guard for more steps.
April 27, 2011, 12:38 p.m. EDT
Fed holds rates, bond-buy plan ahead of conference
By Greg Robb, MarketWatch
WASHINGTON (MarketWatch) â The Federal Reserve on Wednesday left its key interest rates at historically low levels and stuck to its $600 billion bond buying program ahead of a key press conference to set the stage on future policy.
The Fedâs Federal Open Market Committee kept rates at a target range of 0% to 0.25% and said its $600 billion bond-buying program would end as scheduled on June 30.
The worries at the central bank seemed to tilt toward prices over growth. Inflation has picked up and the Fed now says the economic recovery is proceeding at âa moderate pace,â but the central bank still said the inflation pickup will be temporary and the jobs market is still a concern. The Fed took out language about the economy being on a âfirmer footing.â
The decisions were widely expected.
The FOMC made only few changes to the language of the policy statement it issued in March and did not give guidance on the outlook of policy after the end of quantitative easing. The FOMC repeated that rates are likely to stay low for an âextended period.â
The Fed gave itself flexibility by adding that it would âadjustâ its holdings of Treasurys and mortgage-backed securities as needed.
Attention now turns to Fed chairman Ben Bernankeâs first-ever news conference scheduled to begin at 2:15 p.m. Eastern. The Fed will also release its updated economic forecasts for 2011 and 2012 just before the press conference begins.
Economists said the Fed has frozen policy until it has a better sense of the impact of the supply shock on the economy from higher oil prices.
Gasoline prices have risen 27% so far this year to an average of $3.88 nationwide.
Economists say that higher prices at the pump dampens growth because consumers have less discretionary income to spend but also can boost inflation. It is still unclear which of these two factors will dominate.
âI think this meeting was a placeholder,â said Ethan Harris, economist at Bank of America/Merrill Lynch.
Confronted with uncertainty about the economy, âthe natural tendency at the Fed is to hesitate and look for more information,â Harris said.
After strong growth in the last three months of 2010, there are fresh signs that the economy is starting to wobble.
Economists are forecasting growth at a 1.7% rate in the first quarter, about half the rate of the prior quarter.
In addition to high gas prices, the list of worries is long including weakness in European peripheral countries, the large Federal budget deficit and the impact of Japan shutting down its economy in the wake of the earthquake, tsunami and nuclear accident.
âAll these things add a bit of uncertainty,â Harris said.
At the same time, consumer prices have been moving higher. Consumer prices rose 2.7% over the last year in March, the largest gain since December 2009.
Bernanke and his key allies have said that they expect the impact from commodity prices on inflation to be transitory.
The index for consumer prices, less food and energy prices, which some on the Fed say is a better guide for future inflation trends is up 1.2% over the past year, up from a low of 0.6% seen in October.
Economists expect the Fed to begin taking baby steps toward an exit over the second half of the year with the first rate hike not coming until 2012.
A center of attention going forward is whether the Fed will freeze its balance sheet in place by reinvesting maturing mortgage-backed securities in Treasurys.
Economists at Goldman Sachs estimate that the reinvestment amount in the second half of the year will be about $20 billion per month, a small fraction of the $80 billion per month rate under QE2.
Many Fed watchers say ending the reinvestment will be a small tightening step and immediately put markets on guard for more steps.
looking at EURO at 1.4680 , seems CL will have pop to 113 levels ..