Overall, the statement seems more upbeat in terms of economic activity, but seems to place a potentially higher risk of deflation, “With substantial resource slack likely to continue to dampen cost pressures and with longer-term inflation expectations stable, the Committee expects that inflation will remain subdued for some time.” The Fed reiterated they will end […]
Archive:
Fed News
Recently, concerns have been mounting over whether or not the Fed may need to consider a more hawkish stance over potential inflationary pressure. Increments over the past several days in the price indices for both the Manufacturing ISM and Non-Manufacturing ISM have only exacerbated these worries. To help quantify this situation I dusted off the […]
The Fed just announced that they will extend the Term Asset-Backed Securities Loan Facility (TALF) program to March 2010 from its original expiry date of Dec 2009, and to Jun 2010 for CMBS. The TALF was designed to help stoke the asset backed security market in an attempt to help unlock consumer and small business […]
As expected the Fed announced no changes to the target range for the federal funds rate, which currently stands at between 0% and 0.25%. The market was trading up prior to the announcement on what was generally expected to be a more constructive economic outlook from the Fed. In fact the Fed did seem more […]
Historically, gold has been an asset investors turn to in times of uncertainty, especially in regards to inflation. The same is true today. However, is the level of today’s gold prices justified? I believe the answer to that question depends on your belief in the Fed’s effectiveness and willingness to fight inflation. It is my […]
As we expected the Fed cut the fed funds rate by 75bps, and made an equivalent move in the discount rate. What is interesting is that the Fed had two dissenters to the vote, Governor Plosser from Philly and Governor Fisher from Dallas, both wanted a smaller cut. Plosser is a well known hawk on […]
*Sorry for the delay in posting we were experiencing serious computer issues One of the questions on everybodys’ minds is how high would inflation need to go before the Fed would reconsider any further rate cuts. During the recent months’ we have seen increasing down side risks to the US growth forecast, while at the […]
This mornings GDP reading of +0.6% will outweigh the positive ADP number and lead to an additional cut of 50bps at today’s meeting. However, if the Fed were to cut by only 25bps we would expect a large sell-off in the US and global EQ markets; leading to in our opinion to another good buying […]
As we mentioned in last night’s posting, we thought it would be possible to hear from the Fed before the next FOMC meeting if the US EQ markets looked to be down significantly, and they did… The Fed’s latest move should help reduce the risk of recession, stabilize the market, and prove the 2008 Fed […]
*I believe so and this is why… (A quick synopsis)http://www.federalreserve.gov/boarddocs/snloansurvey/ Looking at the trend from the past several Senior Loan Officer Surveys, we have seen lending standards for banks and consumers tighten, while demand has receded and spreads of loan rates verse the banks’ cost of funds are rising. We expect when the next wave […]