Picture of the Day:
Joke of the Day:
Quote of the Day:
"Without QE to support the markets, in my opinion, the economy will likely slow significantly and the stock and real estate markets will most likely turn sharply downward. As a result, I expect the Fed will do its utmost to keep the markets convinced that the QE program is in its final chapters. But these "Open Mouth Operations" likely represent the full inventory of the Fed's policy options. I suspect that when the economic data begins to disappoint, the Fed will quickly reverse course and increase the size of its monthly purchases. In fact, today's Fed statement was careful to avoid any commitments to additional tapering in the future. It merely said that further changes in the amount of purchases will be dependent on the data. This means that QE could go in either direction.
But more important than the taper "surprise" was the unusually dovish language in which the Fed decided to wrap its seemingly bitter pill. Today's statement goes significantly farther than any prior communications in assuring that interest policy, its main monetary tool, will remain far more accommodative, for far longer, than anyone previously predicted. In fact, they have now committed themselves to keep rates at zero until "well after" the unemployment rate has fallen below 6.5%. On this score the Fed is not simply moving the goalposts, they are running away with them. With such amorphous language in place the FOMC appears to be hoping that it will never have to face a day of reckoning in which they will be forced to actually raise rates. On that score they are similar to the legislators on Capitol Hill who want to pretend that America will never have to pay down its debt." --Peter Schiff
Joke of the Day:
Quote of the Day:
"Without QE to support the markets, in my opinion, the economy will likely slow significantly and the stock and real estate markets will most likely turn sharply downward. As a result, I expect the Fed will do its utmost to keep the markets convinced that the QE program is in its final chapters. But these "Open Mouth Operations" likely represent the full inventory of the Fed's policy options. I suspect that when the economic data begins to disappoint, the Fed will quickly reverse course and increase the size of its monthly purchases. In fact, today's Fed statement was careful to avoid any commitments to additional tapering in the future. It merely said that further changes in the amount of purchases will be dependent on the data. This means that QE could go in either direction.
But more important than the taper "surprise" was the unusually dovish language in which the Fed decided to wrap its seemingly bitter pill. Today's statement goes significantly farther than any prior communications in assuring that interest policy, its main monetary tool, will remain far more accommodative, for far longer, than anyone previously predicted. In fact, they have now committed themselves to keep rates at zero until "well after" the unemployment rate has fallen below 6.5%. On this score the Fed is not simply moving the goalposts, they are running away with them. With such amorphous language in place the FOMC appears to be hoping that it will never have to face a day of reckoning in which they will be forced to actually raise rates. On that score they are similar to the legislators on Capitol Hill who want to pretend that America will never have to pay down its debt." --Peter Schiff
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