Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Buzz & Banter


Well, there you have it. From my perch and through my monocle, it looks like the Fed still has an appetite for managing expectations, and thus, the economy. Very little difference from June 25th's policy statement, though hanging their hat on productivity (first paragraph), which corporations are increasing by shedding employees, isn't much of a confidence-booster. Spending is firming but employment trends are mixed. No mention of the strength in financial markets (stock prices and tighter spreads) this time. No need to parse the obvious, perhaps.

The only really interesting part of this statement, which we suspect gets lots of play on the Street, is their tortured effort to wink at the bond market that rates will be low for a long time. The June 25th statement ended like this: "...the probability, though minor, of an unwelcome substantial fall in inflation exceeds that of a pickup in inflation from its already low level. On balance, the Committee believes that the latter concern is likely to predominate for the foreseeable future."

How did this statement end? "...the risk of inflation becoming undesirably low is likely to be the predominant concern for the foreseeable future. In these circumstances, the Committee believes that policy accommodation can be maintained for a considerable period."

So the bond market is left to interpret the difference between a "considerable period" and "the foreseeable future." The only thing "large in amount, extent, or degree" is the hubris that births a strategy designed to manage an economy this large, this complex, and this globally inter-connected.
< Previous
  • 1
Next >
No positions in stocks mentioned.

The informatio= n on this website solely reflects the analysis of or opinion about the perf= ormance of securities and financial markets by the writers whose articles a= ppear on the site. The views expressed by the writers are not necessarily t= he views of Minyanville Media, Inc. or members of its management. Nothing c= ontained on the website is intended to constitute a recommendation or advic= e addressed to an individual investor or category of investors to purchase,= sell or hold any security, or to take any action with respect to the prosp= ective movement of the securities markets or to solicit the purchase or sal= e of any security. Any investment decisions must be made by the reader eith= er individually or in consultation with his or her investment professional.= Minyanville writers and staff may trade or hold positions in securities th= at are discussed in articles appearing on the website. Writers of articles = are required to disclose whether they have a position in any stock or fund = discussed in an article, but are not permitted to disclose the size or dire= ction of the position. Nothing on this website is intended to solicit busin= ess of any kind for a writer's business or fund. Minyanville management= and staff as well as contributing writers will not respond to emails or ot= her communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.<= /p>

Featured Videos