Posts Tagged FED Funds Rate
Monthly Strategy – July 2010
Posted by Belisarius in Monthly Strategy on July 3, 2010
Almost unchanged from June.
Equities
Only extremely favorable economic data could change the negative trend established. This is highly unlikely. So I would say we will soon see S&P 500 at 875.
On a macro level, the stimulus is wearing off, politicians and central bankers are not ready to continue with loose fiscal an monetary policies, just the opposite, austerity is the game. For now.
Private demand is weak. Private investments also show no strength. Real-estate is burdened with unsustainable debt levels, still to high prices and weak demand. Without real-estate investment recovery, we cannot talk on sustainable and historically high economic growth rates.
FOMC Statement, June 23 2010
Posted by Belisarius in Markets on June 23, 2010
Negative tone added to the statement, making a rise in federal funds rate even more distant opportunity.
Economy improving, but the financial conditions less supportive because of developments abroad.
Information received since the Federal Open Market Committee met in April suggests that the economic recovery is proceeding and that the labor market is improving gradually. Household spending is increasing but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software has risen significantly; however, investment in nonresidential structures continues to be weak and employers remain reluctant to add to payrolls. Housing starts remain at a depressed level. Financial conditions have become less supportive of economic growth on balance, largely reflecting developments abroad. Bank lending has continued to contract in recent months. Nonetheless, the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, although the pace of economic recovery is likely to be moderate for a time.
Monthly Strategy – May 2010
Posted by Belisarius in Monthly Strategy on May 5, 2010
Equities
With my 1,200 S&P 500 target reached I’ve moved to a kind of a ambiguous stance to the markets. Now I believe the equity markets are bound for a 10%+ down move at least.
My mid-term view remains unchanged – this is just a bear market rally; U.S. and E.U. economies will experience same patterns in both economy and markets as Japan in ‘90ies.
Recent pickup in consumer spending was due to decreased savings rate, not income growth, so I believe it is unsustainable mid term. The inventory cycle has ran its course, government stimulus is wearing off. A slower GDP growth is almost certain for the second half of the year.
FOMC Statement, April 28 2010
Posted by Belisarius in Markets on April 29, 2010
Nothing major. FED Press Release.
Economic activity picking up; Business spending improving; Construction spending not; Labor market beginning to improve.
Information received since the Federal Open Market Committee met in March suggests that economic activity has continued to strengthen and that the labor market is beginning to improve. Growth in household spending has picked up recently but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software has risen significantly; however, investment in nonresidential structures is declining and employers remain reluctant to add to payrolls. Housing starts have edged up but remain at a depressed level. While bank lending continues to contract, financial market conditions remain supportive of economic growth. Although the pace of economic recovery is likely to be moderate for a time, the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability.
Monthly Strategy – April 2010
Posted by Belisarius in Monthly Strategy on April 1, 2010
Equities
Although I’m convinced that the economy is not pulling a V-shaped almost everywhere except in China and in their commodity based economy satellites I believe that in the short term the equity gains will continue. I have a 1200 S&P 500 target.
I have only a small exposure to the markets (via a June SPY 105/106 put ratio backspread) to keep interest for the markets. It’s performing bad.
My mid-term view remains unchanged – this is just a bear market rally; U.S. and E.U. economies will experience same patterns in both economy and markets as Japan in ‘90ies.
“Exceptionally Low Federal Funds Rate For Extended Period” Encore
Posted by Belisarius in Markets on March 16, 2010
“Exceptionally Low Federal Funds Rate For Extended Period” still here; FED funds rate stays at 0%-0.25% in 9:1 vote with Kansas City Fed President Thomas Hoenig voting again against.
Economic activity picking up; high unemployment; business spending is recovering; housing relapse:
Monthly Strategy – March 2010
Posted by Belisarius in Monthly Strategy on March 1, 2010
Equities
In the macro arena we have leading indicators rolling over, and a stream of worse-than-expected data pieces on U.S. housing, U.S. employment, U.S. durable goods ordered and large move lower by consumer confidence.
Seems that the markets do not appreciate the data. Things that move the markets are only FED policy on rates, dollar strength and Greece debt problems. China credit tightening in forgotten for the time being (at least to the next announcement).
Mr. Bernanke Speech Before The House Committee on Financial Services
Posted by Belisarius in Markets on February 24, 2010
The important part:
The FOMC continues to anticipate that economic conditions–including low rates of resource utilization, subdued inflation trends, and stable inflation expectations–are likely to warrant exceptionally low levels of the federal funds rate for an extended period.
Ben Bernanke vs. Marvin King
Posted by Belisarius in Markets on February 10, 2010
Marvin King:
It was at this press conference one year ago that I explained the asset purchase programme to you. That was at a time of sharply falling output and collapsing confidence. Since then, the position has improved considerably. Output has stabilised and confidence has recovered. The additional money created by the asset programme will continue to boost the economy for some time to come. But the nature of the headwinds means that the recovery is likely to be slow. And there is much uncertainty – about both the outlook for the world economy and the strength of domestic spending. Although the MPC last week announced a pause in its programme of asset purchases, it is far too soon to conclude that no more purchases will be needed. So the Committee will keep its options open, and further purchases will be made if they prove necessary to keep inflation on track to meet the target in the medium term.
“Exceptionally Low Federal Funds Rate For Extended Period” Still Here
Posted by Belisarius in Markets on January 27, 2010
FED just released that the benchmark rate remains unchanged. The “extended period” is still here.
Business conditions are improving but at subdued rate:
Information received since the Federal Open Market Committee met in December suggests that economic activity has continued to strengthen and that the deterioration in the labor market is abating. Household spending is expanding at a moderate rate but remains constrained by a weak labor market, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software appears to be picking up, but investment in structures is still contracting and employers remain reluctant to add to payrolls. Firms have brought inventory stocks into better alignment with sales. While bank lending continues to contract, financial market conditions remain supportive of economic growth. Although the pace of economic recovery is likely to be moderate for a time, the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability.