The Fed told us many times "tapering is not tightening". By that same logic, yesterday's "not to tapering" is "no easing". But the resulting market response certainly felt like an easing. And it will continue to do so for a while.
The Fed decision to maintain $85 bn in monthly asset purchases is the latest manifestation of fiscal policy interfering with the central bank's adjustment of monetary policy. The risk of a government shutdown next month and the resulting failure to raise the debt limit could exacerbate the nascent recovery if $10bn or $15 bn were removed.
Today's release of US August existing home sales hitting 5-year highs and the Philly Fed index at 2-year highs appear a valuable set of evidence in markets' data watch, but it is the labour market data, which command supremacy for the Fed.
What if Yields Rose Again?
Here's the Fed's upcoming trick, likely to be added into the forward guidance. So fat, the guidance has primarily focused on a threshold for the unemployment rate, but yesterday's comments from Bernanke suggested setting an "inflation floor" as a "sensible modification to the guidance". If attained, this could be a successful means of slowing down rising yields as long as falling unemployment is not accompanied by a recovery in inflation. The Fed's preferred inflation figure, core PEC price index, is at 2 ½ year low of 1.2%. Further declines nearing 1.1% could render the inflation forward guidance to become a carte blanche for further awaiting that 6.5% unemployment rate without fretting about the need for higher interest rates.
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Try publishing this in the UK weekend papers: Traders bet BankofEngland will raise rates to 6.25% --highest since 1… https://t.co/GWXrTEAk4R(1 year ago)
Poor start to a slow market day as Ezone PMIs disappoint. Im still keeping an eye on the rare (-2%) USD-GOLD combo,… https://t.co/UyRzWsRbs7(1 year ago)
-5% YTD is not good, while -7% from the year highs can be tough. Gold traders have their eyes fixated on this for n… https://t.co/NV5UMKsfNo(1 year ago)
ما وراء هبوط الدولار مع الذهب و من منهما يتمكن الارتداد؟
موعدنا الآن في غرفة شركة إكس أم لجلسة الأسواق
https://t.co/Y7tD0RxCS2
@XM_COM (1 year ago)
Jobless claims > 300k before next FOMC meeting would be ideal for Fed to make up for any CPI upside surprise (1 year ago)
"Cook & Eat at Home" scheme may come next to defeat UK inflation... (1 year ago)
Earlier in the week gold selloff was attributed to smaller than exp China EASING. Metal is now holding v well despi… https://t.co/ZW9cmXTPWW(1 year ago)
اليوم، كما في سنة 2023 و2021 و2020،تزامنت مستويات الدعم الحاسمةفي مؤشري أس أن بي 500وناسداكمع نقطة التقاء المتوسط المتحرك لمدة21 أسبوعًا والمتوسط المتحرك لمدة 100 يوم
Today, like in 2023, 2021 and 2020, crucial levels of support in the S&P500 and Nasdaq100 have coincided with the confluence pointof the21 week moving average and100 day moving average. Watch now
Latest Hot-Chart - Jul 17
Nasdaq100 Daily & Weekly
The triple top in weekly RSI suggests the following price and time implications: . PRICE: 18700. TIME: Duration of downside may last for another 3 to 4 weeks.
View Hot-Chart..