Market Bullish Ahead of the FOMC Announcement

The immediate-term price action is quite bullish and I wouldn't be surprised to see the ES approach or even retest the May highs. In the bigger picture however, I see the market in a topping pattern and that keeps the bearish outlook alive. I do expect to see lower lows as we trade into the summer.

As I write this and the ES trades near 1645, I am more or less neutral. I will be watching the market reaction to the FOMC announcement today (2.00 pm EST) and the press conference with Ben Bernanke (2.30 pm EST).

Expectations:
Fed will not taper. $85 billion in asset purchases will continue.

The catalyst that started the selling back on May 22nd, was the comment by Ben Bernanke who said, "If we see continued improvement and we have confidence that that's going to be sustained, then we could in the next few meetings ... take a step down in our pace of purchases." 

Since this taper comment, Japanese stocks traded down as much as 20%, emerging markets were down 10% and the S&P 500 was down 5%. All this because Bernanke suggested the Fed will create less than $85 billion dollars per month at some point. But lets get real, the Fed is not going to do this any time soon. $85 billion per month in asset purchases will continue and here is why:

• Unemployment rate has not reached Fed target of 6.5%
• Inflation levels remain subdued. 
• The Fed balance sheet is excessive, it has been excessive and it will continue to be excessive. Tapering will not change this.
• The price of Treasury Bonds is approaching important support levels. The Fed does not want to see selling in treasuries continue at this point. Bernanke will make sure this does not happen. This alone guarantees (in my opinion) that the Fed will not taper at this time.
• Industrial and tech companies need to see an economic recovery in the developing world in the 2nd half of the year. Tapering is not the answer and without a recovery in the developing economies, a world wide economic slow down could ensue.

So what does that mean for equities? I really don't think it means much. Continuing to add $85 billion of liquidity into the markets is enough to prevent sellers from reeking havoc on the markets, but it isn't enough to to surge the markets to new highs from here. We have already seen equities bid up ahead of the FOMC announcement, so some of the bullish sentiment that comes along with continued easing, is already priced in. If the Fed does happen to reduce asset purchases (or taper), you can expect heavy selling to commence. Like I said earlier, this is a very unlikely scenario at this time. 

The market remains elevated (ES is up 23% since November 16th of last year) and price action over the past month continues to signify a potential topping pattern. It would take a surprise increase in the level of asset purchases by the Fed to sustain this remarkable bull market without seeing a more significant correction first.

We'll see what kind of language we get from Bernanke. There is still room for the market to move a little higher before more sellers come back into the picture.

Levels to watch on the ES (U - September 2013 Contract):

Resistance above at: 1655-1656, 1659-1660, 1664-1665, 1674-1675

Support below at: 1635-1636, 1629-1630, 1607-1608, 1592-1593.

Looking further ahead, I am expecting a bottom in the 1555-1565 range. But we'll listen to what Ben has to say before getting too ahead of ourselves...

Watch Ben Bernanke FOMC Press Conference Live 3/20/2013

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And its Risk-Off to Begin the New Week

I've been waiting and waiting for a signal to hold a short over the past week, but the upward consolidation has been persistent for the past eight trading days. Instead of revealing a high odds inflection point at which to enter the market short, futures gapped lower at the Globex open on Sunday, leaving the prudent shorts behind. You would have needed to be a bit aggressive to be short ahead of this drop. In any case, the market is positioning itself to gap significantly lower as the stock market opens this morning. First target to the downside for the ES will be the previous highs at around 1525 (ESM13 June Contract). Look for support to come in anywhere between 1515 and 1525. I will consider long entries in this range. If the ES sees a bounce before that happens I will look to enter short following a move back up above 1550.

Several factors influenced weakness that began on Friday. First there was concern and anticipation over how finance ministers of the 17 members of the Eurozone would negotiate a bailout deal for the island of Cyprus. Second was the US consumer price index, which jumped higher and rekindled some concerns about inflation. Third, US consumer sentiment took a surprise plunge to 71.8 vs about 79 during the last two weeks of February. The expectations component of the report fell 8.5 points to 61.7 which is the lowest reading since the debt ceiling debacle and US ratings cut in the third quarter of 2011. 

By the end of trading on Friday, there was no bailout deal in place for Cypress.

By the time Futures markets opened on Sunday, it was risk-off in reaction to an unprecedented decision by Eurozone leaders to make Cypriot bank depositors responsible for part of the bailout of the Island of Cyprus. You can find an interesting take on the situation in the article Cyprus: the world’s biggest “poker game.”

A Cypriot bank holiday today will limit the immediate reaction. The deposit levy (the tax on depositors) - set at 9.9 percent on bank deposits exceeding 100,000 euros and 6.7 percent on anything below that - will be imposed on Tuesday, if voted through in parliament.

So, we may see a bit of a subdued reaction or consolidation following the first hour or so of trading today. If the ES does manage to see a bounce later, it will likely be a good shorting opportunity. If we see consolidation later today, I will probably favor selling the upper part of the consolidation range for some day trades. Other than that I will consider long entries where-ever the ES finds support in the 1515-1525 range. We'll see how this plays out into Tuesday and then into Wednesday with the FOMC announcement and Chairman Bernanke's press conference.

Levels to watch now on the ES (M13 June Contract):
Resistance above at: 1542-1543, 1548-1550, 1553-1554
Support below at: 1524-1525, 1519-1520, 1514-1515

GDP Disappoints, Fed Minutes Offer no Surprises

GDP came in on Wednesday morning at a significant miss of expectations showing that the economy weakened in the fourth quarter, with a minus 0.1 percent annualized pace.

FOMC minutes reveal the Fed's point of view with no surprises:

• Growth in economic activity paused in recent months
• Inflation has been running somewhat below the Committee’s longer-run objective
• If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of Treasury and agency mortgage-backed securities, and employ its other policy tools as appropriate, until such improvement is achieved in a context of price stability
• The exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6-1/2 percent, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee’s 2 percent longer-run goal, and longer-term inflation expectations continue to be well anchored
• Voting against the action was Esther L. George, who was concerned that the continued high level of monetary accommodation increased the risks of future economic and financial imbalances. 

The thing that is genius about Bernanke and the Fed is that they have mastered the rhetoric which describes their policies to influence the markets in a positive way. Continued loose monetary policy is bullish for the markets and even the idea of tightening monetary policy can be viewed as bullish because that would mean employment is up and the economy is recovering. Fed minutes will likely be a non-issue for a while as the market already knows what to expect looking forward. Of course any surprises would certainly influence the markets, but expectations for now are that there will be no surprises.

I am officially bearish in the short-term. I believe 1506 on the ES is the short-term high (which happens to be right in the middle of my resistance range from the last post). I will now be looking to short any rallies. I'm looking for a bounce off the 1495 level on the ES and will look for shorts between 1500 and 1504. Consider stops on any shorts if the ES confirms a move above 1512. First target to the downside is 1487-1488 and second target is 1479-1481. I will consider longs again if the 1480 support holds.

Market Higher Ahead of Final FOMC Announcement of the Year

Part of the recent run-up in stock market price is likely due to speculation that the Fed will increase its asset purchase program by an additional $45 billion to compensate for the termination of Operation Twist at the end of the year. Operation Twist will not be extended because the Fed is running low on short-term securities to sell. So to continue to buy longer term maturities in the same capacity, the Fed will need to do so through additional quantitative easing.

This will bring total outright purchases by the Fed to $85 billion/month. This is an additional $45 billion on top the current open-ended purchases of $40 billion (from QE3 announced 10/24). Anything less than this will be perceived as a disappointment and the market will likely sell-off as a result. Expect volatility following the announcement at 12:30pm EST as well as Bernanke's press conference later in the afternoon at 2:15pm EST.

The Fed could add $2.2 trillion or more to its balance sheet over the next two years. This will continue to keep interest rates low and to maintain an artificial level of support underneath the financial markets looking forward.

Without surprise monetary easing measures by the Fed, or something larger than an additional $45 billion/month in asset purchases, I expect markets to sell off following the Announcement. If we do get the sell-off, it will setup a nice buying opportunity next week. We really haven't seen any selling in this market since the ES E-mini S&P 500 Futures bottomed at 1340.25 on November 16th. This market is due for a little bit of fear before the end of the year, it is due for at least a small pullback. That pullback, if we get it, will create the first good dip-buying opportunity since mid-November to position yourself long into the end of the year.

Some levels to watch on the ES (Z December Contract):

Resistance above at 1435-1436, 1439-1440, 1450-1451, 1455-1456

Support below at 1419-1420, 1411-1412, 1401-1402

To QE or Not to QE? That is Fed's Question

But my question is how much expectation is there that the Fed will announce more QE. There has been much speculation that the Fed will offer a plan to expand its balance sheet by offering additional easing measures today and more pundits seem to be chiming in with this opinion than in times past. While I am ready for the possibility that this may be the case, I do not think it is going to happen.

Yes the employment situation is stagnant, but is buying mortgage backed securities going to change that? Highly unlikely. Another way the Fed could ease, is to lend dollars to the ECB so that ECB could then fund their own easing measures. The US "easing" in this case would be in the assumption that those European lent dollars would eventually find their way back into the US economy. Sounds like a bad idea to me and is unlikely to be announced today. The main reason why the Fed won't offer more QE today though is because the market is at its highest levels since early 2008 and other economic indicators (aside from employment) have been refreshingly positive of late. More QE now would be acknowledgement by the Fed that there is little hope for the economy. There is no way that the time is now to offer additional QE. Keep those tools in the shed Bernanke.

But hey the Federal Reserve isn't asking my opinion and all I can do is speculate on what is going to come out of yesterday's minutes. I won't worry about whether I am right or wrong, I will just be ready to trade the Market reaction to whatever comes out of the Fed announcement and Bernanke's press conference.

We will see the first reaction today at 12:30 EST when the FOMC announcement will be released. The Fed will leave rates unchanged and will likely extend guidance beyond 2014 to keep rates exceptionally low. If there is a new asset purchase program, it will be detailed in the announcement. If this happens, the market will react with volatility and I would look to buy the first significant dip. If there is some form of QE announced we may not even get a significant dip. If you are of the belief that there will be additional QE, then perhaps you are already long going into the announcement. But you have to be cautious playing that game as the market is already bid up quite a bit ahead of that potential news. That is why my biggest question is how much is or isn't additional QE already priced into the market. The market reaction later today should provide answers.

At 2:15pm EST, Bernanke will give his press conference. Again, depending on what comes out of the announcement, the market will be reacting to Bernanke's statements here and we can expect volatility. Ultimately, if there is no new easing/asset purchase program by the Fed, I'll be looking for opportunities to get short and sell any rallies. If there is a new easing program, I'll be looking to buy any significant dips.

As much anticipation as there is ahead of the Fed announcement, I think the bigger issue remains in Europe and not whether the Fed will ease further. I believe that money printing will come from the ECB before it comes from the Fed and likewise, markets seem to react more to what Draghi has to say lately than what Bernanke has to say...

I will comment more following Bernanke's press conference which you can watch here.

Watch Bernanke's Press Conference Live 9/13/2012

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To QE or Not to QE? That is Fed's Question. Or Is It?

Fed Minutes Bullish, but Market Reaction Limited So Far

Its interesting to observe market behavior following yesterday's Fed minutes which suggested members are warming up to the idea of increased stimulus. This would have ignited a significant rally had it come a month ago. But yesterday's rally lost steam quickly and markets have already traded down only 4 points off yesterday's lows. 

This morning's negativity is in reaction to St. Louis Fed President Bullard who contradicted yesterday's minutes when he said that current economic conditions do not yet warrant further easing. Even before Bullard's comments, though, the reaction to the Fed's bullish minutes did not ignite nearly the rally that I would have expected. This may be just because we remain in the summer vacation time-period in the markets, but it may also be signalling that the markets do not have that much steam left to push them higher. 

That being said, I continue to like the market if the ES trades down to the lower 1400s and support confirms there. So we'll see how the first hour of trading goes this morning. I like long entries down in the lower 1400s on the ES.

Watch FOMC Press Conference with Ben Bernanke Live June 20th, 2012

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FOMC Announcement to come at 12:30pm EST today and will be followed by Ben Bernanke's press conference at 2:15pm EST. It was only a little more than two weeks ago that the ES traded down as low as 1255. The ES has been bid up 100+ points since then and you can attribute the buy orders as speculative bets that the Fed would announce some new easing measures or stimulus or QE3 at the next meeting (which will be announced today). 

Things looked much worse a couple of weeks ago than they do today, at least in terms of stock market prices and an argument for more easing was more plausable. My thoughts on the announcement today is that there will be no new major news. Bernanke will repeat the same things we have heard in the past...

• Unemployment levels remain elevated, but labor market conditions are improving
• Increases in inflation levels are transitory, longer term inflation levels remain stable
• The committee expects to see moderate growth continue over the short-term and to pick up gradually over coming quarters. This in turn will help bring down levels of unemployment over time.
• The committee expects to maintain a highly accommodative stance on monetary policy for the foreseeable future

With stock prices only 4% off this year's highs and economic conditions relatively stable, there is no way the Fed can rationalize another round of QE. Operation Twist is scheduled to end in September, so look for the Fed to announce that this will be extended. That will not be a surprise and should not provide any catalyst for buying. Without some form of stimulus in the form of QE or some sort of assistance to help the debt situation for countries like Spain, Greece, Italy or any of the Other PIIGS, expect the markets to be disappointed. This is my expectation and therefore I will be looking to sell any rallies looking forward assuming the Fed does not offer any surprises. We'll see... I'll comment following Bernanke's press conference...

To summarize, I expect the Fed to disappoint by not giving the market what it has become accustomed to getting, more QE. This is negative for the stocks and means that I am bearish looking forward. I like selling rallies and will not be surprised to see lower lows in the coming months. If Bernanke does offer up any surprises today, my outlook will change, we'll have to wait and see.

Watch FOMC Press Conference with Ben Bernanke Live Today 4/25/2012 at 2:15pm EST

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Watch for volatility in the markets this afternoon. A failure to show a positive inclination to more easing or QE3 shouldn't have as much of a negative effect on price action as it has in the past, as the market is not expecting it as much as in previous months. One thing to look out for is the Fed's forecast on growth and inflation and if it continues to stick with the plan to keep rates low. Any mention that there is not a need to stick with the plan to keep rates low until at least 2014 should influence selling in the market. In any case, I think there is more of a chance for disappointment in reaction to the Fed's forecast rather than elation... we'll see...

Watch FOMC Press Conference with Ben Bernanke Live Here 1/25/2012

12:30pm EST: FOMC rate decision and statement.

2:00pm EST: Forecasts released.

2:15pm EST: Fed Chairman Bernanke press conference. Watch Below:



Maybe we will see some increase in volume and volatility this afternoon following Bernanke's press conference. I will likely be watching from the sidelines until the market reacts and reveals sentiment.

If the market shows a negative reaction, I like support at 1295-1296 on the ES and even more so at 1287-1288 ES. On the opposite side, I like resistance at 1319-1320 and would likely short any rallies to that level.

Watch FOMC Press Conference Live

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Not expecting significant reaction to the FOMC meeting today. Statements released so far are more or less in-line with previous statements. No new measures have been announced, though Chicago Fed President Charles Evans dissented by requesting more accommodation.

Some selling has followed the announcement.

In any case, Bernanke will speak live at 2:15pm EST. You can watch it live above.

What to Expect from Bernanke and the FOMC Announcement

The FOMC began its two day meeting this morning and will make its announcement on monetary policy tomorrow (Wednesday) at 2:15pm EST.

I am expecting volatility following the announcement. It is a gamblers game to try and predict how the market will react, but often times the initial move is the false move and will be followed by a reversal. We already know what the Fed's longer-term game plan is. To put it simply, the Fed wants to keep interest rates low and devalue the US dollar. This is nothing new. Low interest rates encourage spending and a devalued dollar makes US exports more affordable for foreign importers. This in theory will increase employment and stimulate the economy. At the same time it will decrease the existing US debt by essentially making that debt worthless. If the dollar is worth half as much as it once was, that makes the debt only half as large as it should be. This is good for an insolvent government, but bad for its people as their ability to purchase real assets decreases.

That describes what the Fed wants to do. Now the question is what will they actually announce tomorrow?

OPTION A)
More Stimulus in the form of a QE3 type of measure:
There are some economic conditions, at present, that could warrant this type of action. The US has seen zero job growth and flat retail sales in August. Commodity prices seem to be in a downtrend which provides additional support that inflation is not a problem. That being said, I don't see QE3 (or something similar) as an option. Expanding the balance sheet to buy more bonds will send more money into the precious metals market and drive commodity prices higher. The Fed and Central Banks around the world do not want to see the price of Gold increase further. They want to continue to deceive the uninformed public that fiat currency is legitimate tender. Depreciating currencies will eventually lead to the adoption of a gold standard or something like it and that would prevent the Central Banks from being able to print money at will. QE1 and QE2 can already be viewed as failures and launching a QE3 now would be ill-advised. It will likely happen down the road, but the time is not now.

OPTION B)
The Fed will announce a plan to sell short-maturity Treasury debt and use the proceeds to buy longer-term bonds:
This is what many expect the Fed to do, an action popularly coined "Operation Twist" because the goal is to bend the yield curve. Currently the yield curve shows 3 month treasury yields at 0.1% and 30 year yields at 3.2%. By selling short-term bonds and buying longer-term bonds, the Fed will attempt to flatten the yield curve. Flat yield curves generally precede economic slowdowns, but low yields across the board generally promote spending through borrowing. So in reality, "Operation Twist" seems more like rhetoric from the Fed than anything else. In any case, unlike quantitative easing or QE, the "Twist" (good or bad) can be done without increasing the money supply.

Implementation of "Operation Twist" alone should not have a large effect on the markets. In fact, that news alone would likely send the markets lower as I believe it is already priced in. The FOMC's 2-day meeting is a break from the standard 1 day meeting and suggests that the Fed has something else up its sleeve...

What else could the Fed do?
Below I have included some additional options (taken from David Rosenberg and commented on by Mish Shedlock):
-------------------------

1. Eliminate the interest paid to commercial banks on excess reserves (to try to spur lending).
   
2. Announce an explicit ceiling on the 10-year note yield (say 1.5%), which the Fed has done in the distant past. Based on Bernanke's prior rhetoric, this would seem to be a preferred strategy (though the Fed relinquishes control of the balance sheet).
   
3. Buy foreign securities (bail out Europe and weaken the U.S. dollar — talk about killing two birds with one policy stone).
   
4. Announce an explicit higher inflation target or perhaps a lower unemployment rate target (i.e. reinforce the DUAL mandate).
   
5. As Mr. Bernanke stated for the record in November 2002, the Fed does have broad powers to lend to the private sector indirectly via banks, through the discount window. It could offer fixed-term loans to banks at low or zero interest, with a wide range of private assets (including, among others, corporate bonds, commercial paper, bank loans, and mortgages) deemed eligible as collateral. For example, the Fed might make 90-day or 180-day zero-interest loans to banks, taking corporate commercial paper of the same maturity as collateral. Such a program could significantly reduce liquidity and term premiums on the assets used as collateral. Reductions in these premiums would lower the cost of capital both to banks and the nonbank private sector.
   

Read Mish's entire article here.
-------------------------

Whatever the Fed announces, expect volatility. I will most likely stay away from trading the initial reaction. For me it is best to try and digest the announcement and wait for the market to settle down and give a more realistic indication of the next direction.

What I foresee is initial selling pressure that could take the markets down significantly. This will signal a buy entry for me as I believe the goal of whatever the Fed announces will be to stimulate the markets. We'll have to wait and see what unfolds tomorrow... Could be some fireworks...

Gapping Down to Begin the Week as FOMC Meeting Looms

Following positive gains for five consecutive days last week, the markets gap down significantly this morning. The negative sentiment follows similar action in global markets as all the major bourses are down to begin the week.

I like long entries around 1180 ES today.

The big event this week will be the 2-day FOMC meeting which begins tomorrow. Expect volatility. I will publish more detailed thoughts on this topic this evening.

More Hints of Additional Easing by the Fed?

The FOMC minutes today revealed that some members expressed the view that additional accommodation was warranted because they expected the unemployment rate to remain well above, and inflation to be at or below levels consistent with the Committee's mandate.

Current Market Action and Bernanke's Jackson Hole Speech

We saw some interesting action on Friday as Bernanke's Jackson Hole Speech was released at 10:00am. The markets were already selling off from Thursday's highs and although Bernanke's speech didn't reveal too much more than what we already expected, the market saw significant volatility. We saw the ES trade down to 1132.75 and then rally with tremendous strength. If you want to disect the news, we could attribute the initial selling to the reaction that no additional stimulus was announced. Then you could look at the subsequent rally as a reaction to Bernanke stating that the FOMC meeting in September would extend to two days from the typical one day meeting to allow a fuller discussion. This brings anticipation that perhaps a new form of stimulus or quantitative easing will be announced in September.

Regardless of that news it looks like the market has put in a temporary bottom below 1100 (ES) and a new up-trend is upon us. I am looking for last week's high of 1188.50 (ES) to be taken out this week. Expect some brief resistance at 1220 followed by a move to 1240. I will consider unloading any long positions above 1240. ES could make a run toward 1300, getting as high as 1270-1280, but I will be looking to get short at that point if it makes it that high. What happens from there will be too speculative for me to write about now. We'll see. But for the next month I see a choppy market that will move higher before it moves lower. I expect some selling as we approach the September 20-21st FOMC meeting and we'll see if the Fed can push the market higher from there.

IN SUMMARY:
I am biased to the long side as I expect the S&P 500 to head toward the mid 1200s. 1140 ES must hold as support this week for my long bias to remain intact.

Notes from FOMC Announcement

Reiterates 'transitory' comment: Temporary factors, including the damping effect of higher food and energy prices on consumer purchasing power and spending as well as supply chain disruptions associated with the tragic events in Japan, appear to account for only some of the recent weakness in economic activity.

Downgrade on inflation- Today: inflation has moderated as prices of energy and some commodities have declined from their earlier peaks. Longer-term inflation expectations have remained stable... June 22: Inflation has picked up in recent months, mainly reflecting higher prices for some commodities and imported goods, as well as the recent supply chain disruptions. However, longer-term inflation expectations have remained stable.

This statement is the biggest suggestion that more QE may be forthcoming: Moreover, downside risks to the economic outlook have increased. The Committee also anticipates that inflation will settle, over coming quarters, at levels at or below those consistent with the Committee's dual mandate as the effects of past energy and other commodity price increases dissipate further.

And more suggestions off new tools being used: The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate. The Committee discussed the range of policy tools available to promote a stronger economic recovery in a context of price stability. It will continue to assess the economic outlook in light of incoming information and is prepared to employ these tools as appropriate.

-from briefing.com

Up, Down and Repeat... Will There Be a Sustained Move and in Which Direction?

As long as there continues to be uncertainty in regard to the US Debt Ceiling, QE3 and the risk of default on sovereign debt in the PIIGS, the markets will continue to swing up and down with speculation, optimism and fear.

There will likely be uncertainty around these topics throughout the summer. The reason I expressed concern (in the previous post) that the market could see another leg down, is because the commodity complex continues to have the potential to correct further. It would be in the Feds best interest to see this happen because it would support their case that inflation is not a problem and that, in fact, deflation is the concern. Falling commodities and a weakening stock market would be the easy catalyst for the Fed to move ahead with more stimulus. It doesn't mean another move down is inevitable, but it presents the possibility. If so, it will be a buying opportunity. The market will eventually move to new highs, but until we see some sort of confirmation that the debt ceiling will be raised and/or that the Fed will confirm another round of stimulus, the timing of catching the move will be uncertain.

Worth Mentioning
In the FOMC minutes from yesterday, some participants supported that there could be a need to provide additional monetary policy accommodation. Reaction sent the markets ripping higher yesterday morning, but the gains were not held as the choppy action continues.

Precious metals also ripped higher in reaction to the Fed comments. The difference with the metals is that they have been holding their gains. Bernanke and the Fed would prefer this not happen as they will have to find new ways to skate around the fact that inflation is not a concern. Good luck with that. With sovereign debt fears in Europe, inflation fears in China and Brazil and a continuation of loose monetary policy by the Fed and other Central Banks, global interest in the precious metals is only growing. The metals can be a risky and volatile asset to trade, but looking into the future, they are the safest asset to own. I like buying the dips in the metals for as far as I can see.

Current overall market bias: Expect choppy action to continue.

Watch FOMC Press Conference with Ben Bernanke Live Here 6/22/11

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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.

Watch FOMC Press Conference With Ben Bernanke Today at 2:15pm EST Here

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Chairman Ben S. Bernanke will hold press briefings four times per year to present the Federal Open Market Committee's current economic projections and to provide additional context for the FOMC's policy decisions.

In 2011, the Chairman's press briefings will be held at 2:15 p.m. following FOMC decisions scheduled on April 27, June 22 and November 2. The briefings will be broadcast live on the Federal Reserve's website. For these meetings, the FOMC statement is expected to be released at around 12:30 p.m., one hour and forty-five minutes earlier than for other FOMC meetings.

The introduction of regular press briefings is intended to further enhance the clarity and timeliness of the Federal Reserve's monetary policy communication. The Federal Reserve will continue to review its communications practices in the interest of ensuring accountability and increasing public understanding.