The October Federal Reserve FOMC meeting concludes tomorrow and investors on both sides of the Atlantic are wondering whether as expected the Fed will announce the end of the latest round of asset purchase schemes and indicate that interest rates will remain low for a considerable period. Some are even raising the possibility that the current $15 billion of monthly asset purchases may be maintained but this is probably an unlikely scenario in the face of strong American economic data. There may be global headwinds which may batter the US economy but for now domestic activity seems to be ticking along nicely.
Stock markets have rebounded strongly in the last 2 weeks as earnings continue to come in strongly in the US and it is clear that central banks seem to be keen to underpin confidence with continued easy money. With stock market volatility so high in October caused by weakness in the eurozone and worries about China and even the Ebola virus some members of the Federal Reserve and even the European Central Bank were talking up prospects for economic support if it became necessary and the ECB is soon to begin an asset purchase programme similar to that used in the United States. So far from taking a passive approach, central banks seem to have taken on board concerns about weak global growth and are likely to keep maintain an accommodative monetary policy for longer than was originally forecast.
It will be interesting to see what Janet Yellen has to say tomorrow as the FOMC concludes. It used to be called the “Bernanke put” helping to put a floor on the stock markets of the world, is the “Yellen Put” now the future?
Contrarian Investor UK
IMPORTANT: The posts I make are in no way meant as investment suggestions or recommendations to any visitors to the site. They are simply my views, personal reflections and analysis on the markets. Anyone who wishes to spread bet or buy stocks should rely on their own due diligence and common sense before placing any spread trade.
by contrarianuk
Investors keen to hear what the Federal Reserve has to say
Oct 28, 2014 at 5:31 pm in Market Commentary by contrarianuk
The October Federal Reserve FOMC meeting concludes tomorrow and investors on both sides of the Atlantic are wondering whether as expected the Fed will announce the end of the latest round of asset purchase schemes and indicate that interest rates will remain low for a considerable period. Some are even raising the possibility that the current $15 billion of monthly asset purchases may be maintained but this is probably an unlikely scenario in the face of strong American economic data. There may be global headwinds which may batter the US economy but for now domestic activity seems to be ticking along nicely.
Stock markets have rebounded strongly in the last 2 weeks as earnings continue to come in strongly in the US and it is clear that central banks seem to be keen to underpin confidence with continued easy money. With stock market volatility so high in October caused by weakness in the eurozone and worries about China and even the Ebola virus some members of the Federal Reserve and even the European Central Bank were talking up prospects for economic support if it became necessary and the ECB is soon to begin an asset purchase programme similar to that used in the United States. So far from taking a passive approach, central banks seem to have taken on board concerns about weak global growth and are likely to keep maintain an accommodative monetary policy for longer than was originally forecast.
It will be interesting to see what Janet Yellen has to say tomorrow as the FOMC concludes. It used to be called the “Bernanke put” helping to put a floor on the stock markets of the world, is the “Yellen Put” now the future?
Contrarian Investor UK
IMPORTANT: The posts I make are in no way meant as investment suggestions or recommendations to any visitors to the site. They are simply my views, personal reflections and analysis on the markets. Anyone who wishes to spread bet or buy stocks should rely on their own due diligence and common sense before placing any spread trade.