Wednesday, June 22, 2011
Watch FOMC Press Conference with Ben Bernanke Live Here 6/22/11
Click here for the latest FOMC Announcement post.
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The FOMC Announcement will be at 12:30 pm EST today and will be followed by the 2nd ever FOMC press briefing with Ben Bernanke at 2:15 pm EST where he will discuss the FOMC's latest quarterly economic projections. The purpose of the briefings is to provide additional context for the FOMC's policy decisions and to allow for Q&A with the press. According to the Fed, the "introduction of regular press briefings is intended to further enhance the clarity and timeliness of the Federal Reserve's monetary policy communication."
I don't expect any significant information to be revealed. The fact that the economy is in a "soft spot" (or some other euphemism) will be acknowledged, but ultimately, as was said in the last Fed meeting, easy monetary policy will continue until there is evidence that inflation has truly become a problem. The market is already down significantly since early May. There may be some brief volatility this afternoon, but I expect the rally that began yesterday to continue in the days that follow.
Check back here at 2:15 pm EST to watch the Press Conference live.
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Fed Statement: Economic recovery is continuing at a moderate pace, though somewhat more slowly than the Committee had expected; sees exceptionally low levels for the federal funds rate for an extended period...
ReplyDeleteWhat is mean?
ReplyDeleteRe: QE3 or continued easing:
ReplyDelete"The Committee will complete its purchases of $600 billion of longer-term Treasury securities by the end of this month and will maintain its existing policy of reinvesting principal payments from its securities holdings."
Key here is that Fed will continue to reinvest securities holdings and continue to buy Treasuries. Short-term significance is that interest rates remain low and support will continue to prop the markets up...
NOTE: when I said the Fed would continue to buy treasuries, that was not a quote from Ben Bernanke that there would be a QE3, it was just my speculation that the Fed would find a way to buy more treasuries without necessarily announcing a QE3. This could be in the form of US and foreign banks buying treasuries based on their relationship with the Fed and a kind of payback for the easy monetary policy that allowed these banks to profit from prior Quantitative Easing measures. The bottom-line is that the Fed will need to find a way to buy treasuries after QE2 ends later this month.
ReplyDelete