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Two Ways: FOMC Keeps Hands Off Rates


Strengthen your portfolio in good times and bad.

This afternoon, the Federal Open Market Committee (FOMC) released a policy statement nearly identical to the last one, voting to leave rates unchanged for "an extended period," while also keeping a lid on its bond purchasing program.

Policy makers said the economy is still likely to be weak for some time, because consumer spending remains weak, and businesses continue to lay off workers.

The Fed made no changes to the bond purchase program it laid out in March, when it said it would buy $300 billion in longer-dated Treasuries and would expand purchases of mortgage-backed securities to $1.25 billion, as well as agency debt to $200 billion by year's end.

The Central Bank defended inflationary concerns, saying "substantial resource slack" would likely dampen cost pressures, and that the FOMC expects inflation to remain subdued for some time.

For more on the economy, see Professor Jack Lavery's An Economic Trough on the Horizon?

From the Bull Pen: Have a look at the performances of Blackrock High-Yield Fund (HYT) and the iShares High-Yield Corporate Bond ETF (HYG) today– bullish hints of increasing risk appetite. Consider the S&P Depository Receipts (SPY); a sell stop can be set near $88.50.

From the Bear Cave: Bears can look for a play in The Cheesecake Factory (CAKE). Consider downside entry if and when the stock can rally to its 20-day moving average (near $17).

Stay classy, Minyanville! Have a great night!
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