Posts Tagged ‘federal funds rate’

Punxsutawney Fed Keeps Rates So Low They Barely Cast a Shadow

Punxsutawney Fed Keeps Rates So Low They Barely Cast a Shadow

Courtesy of Joshua M Brown, The Reformed Broker 

So the Fed Groundhog came out of his hole at 2:15 pm today, sniffed the air, took a glance at the data and decided that there will be 6 more months of kitchen-sink policy.  He certainly signaled a continuation of economic winter.

The Fed Funds target rate will remain at 0 to .25% and the Mortgage Backed Securities/Treasuries eating contest will continue apace.

Below is the full text of the statement.  For fun, note how badly they wanted to use the "D" word (deflation) but how deftly they restrained themselves…

Information received since the Federal Open Market Committee met in June indicates that the pace of recovery in output and employment has slowed in recent months. Household spending is increasing gradually, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software is rising; however, investment in nonresidential structures continues to be weak and employers remain reluctant to add to payrolls. Housing starts remain at a depressed level. Bank lending has continued to contract. 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 more modest in the near term than had been anticipated.

Measures of underlying inflation have trended lower in recent quarters and, with substantial resource slack continuing to restrain cost pressures and longer-term inflation expectations stable, inflation is likely to be subdued for some time.

The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and 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.

To help support the economic recovery in a context of price stability, the Committee will keep constant the Federal Reserve’s holdings of securities at their current level by reinvesting principal payments from agency debt and agency mortgage-backed securities in longer-term Treasury securities.1 The Committee will continue to roll over the Federal Reserve’s holdings of Treasury securities as they mature.

Source:

Fed Statement Following August Meeting (WSJ) 


Tags: , , , , , ,




Bernanke’s High-Wire Juggling Act

How much longer can Bernanke’s high-wire juggling act last, and what’s going to crash to the ground first? – Ilene

Bernanke’s High-Wire Juggling Act

high wire juggling actCourtesy of Mish

Inquiring minds are reading the New York Times article, Rift Emerges in Fed Over When to Tighten Money.

Fissures are developing among policy makers at the Federal Reserve as they debate how and when to start raising the benchmark interest rate from its current level just above zero.

With Fed officials forecasting that unemployment will average 9.8 percent in 2010, nobody appears to be arguing that monetary policy should be tightened anytime soon.

But Fed officials have hinted at new disagreement in recent weeks. The arguments go beyond the traditional split between hawks, who worry that easy money will stoke inflation, and doves, who contend that unemployment is the top problem.

The more devilish debates are about how fast to act once the decision has been made, and how to carry it out. Beyond raising the overnight federal funds rate, the Fed also has to unwind $2 trillion in special programs that prop up paralyzed banks and credit markets.

“When the economic outlook has improved sufficiently, we will be prepared to tighten the stance of monetary policy and eventually return our balance sheet to a more normal configuration,” Mr. Bernanke promised.

Policy makers are haunted by the results of previous miscalculations. Mr. Bernanke and others have warned that the central bank should not repeat its error in 1937, when it raised interest rates too early and helped extend the Depression for several years.

At the same time, officials at the Fed are acutely aware that it has been widely blamed for contributing to the housing bubble and the financial collapse by keeping the cost of borrowing too low for too long after the recession of 2001.

Fissures or Canyons?

Are these fissures we are discussing or canyons? Take a look at what some Fed Members are saying.

Thomas M. Hoenig, president of the Federal Reserve Bank of Kansas City: “My experience tells me that we will need to remove our very accommodative policy sooner rather than later. Even if we were to start immediately, much time would pass before incremental increases could be considered tight or even neutral policy.”

Richard Fisher, president of the Federal Reserve Bank of Dallas: "“That wind-down process needs


continue reading


Tags: , , , , ,




The Horrible Conundrum Facing The Fed

The Horrible Conundrum Facing The Fed 

firehose, money, bank of americaCourtesy of Karl Denninger at The Market Ticker


continue reading


Tags: , , , , , , , , ,




 
 
 

Zero Hedge

What's Going On At Goldman? Another Senior Exec Just Jumped Ship

Courtesy of ZeroHedge View original post here.

In the last few days, Goldman Sachs has lost two very senior executives from the investment bank's two biggest bets on the future - consumer finance (Marcus) and wealth-management - and now, the behemoth's chief lawyer is abandoning ship.

Leaving many asking - what is going on at Goldman?

Sunday saw Omer Ismail - the head of Goldman's consumer-facing commercial bank - Marcus - jump ship to join Walmart (and Davi...



more from Tyler

ValueWalk

As Spring Thaw Arrives in DC, COVID Aid Remains Frozen in Congress

By Jacob Wolinsky. Originally published at ValueWalk.

As the snow clouds that have shrouded much of the United States for the past month make way for warm bouts of sunshine, it’s important to take stock of what’s still frozen solid over on Capitol Hill:

Q4 2020 hedge fund letters, conferences and more

  • COVID-19 Relief
  • A fair minimum wage
  • The confirmation proceedings of several of Biden’s Cabinet nominees – notably his nominees of color
  • The confirmation votes of Deb Haaland and Xavier Becerra to serve in the Cabinet
Nominees of Color Face Unprecedented Delay ...

more from ValueWalk

Phil's Favorites

Will Senator Toomey Engage in Koch-Speak at Today's Senate Confirmation Hearing?

Courtesy of Pam Martens

Senator Pat Toomey

The Senate Banking Committee will convene today to conduct confirmation hearings for President Joe Biden’s nominees to fill two key Wall Street watchdog posts: Gary Gensler to Chair the Securities and Exchange Commission (SEC) and Rohit Chopra as Director of the Consumer Financial Protection Bureau (CFPB).

As a result of Democrats taking control of the Senate, Sherrod Brown, a Democrat from Ohio, is the new Chair of the Senate Banking Committee. Curiously, however, the prior Republican Chair of the...



more from Ilene

Kimble Charting Solutions

Semiconductor Stocks Looking To Trigger Bullish Breakout Signal

Courtesy of Chris Kimble

After years of underperformance, the Semiconductors Sector (SMH) turned the tables in 2016, becoming a market leader.

And today, the Semiconductors are looking to further cement that leadership role.

Today’s long-term “monthly” chart highlights the ratio of Semiconductors Sector (SMH) to Nasdaq 100 (QQQ), showing how the Semis have taken the lead in the past 5 years… as well as an important breakout test going on today!

Line (1) was support twice in the 2000s. When that failed, it le...



more from Kimble C.S.

Mapping The Market

Which Governments Ordered Johnson & Johnson's Vaccine?

 

Which Governments Ordered Johnson & Johnson's Vaccine?

Courtesy of Niall McCarthy, Statista

On Wednesday, U.S. regulators announced that Johnson & Johnson's Covid-19 vaccine being developed by its subsidiary Janssen Pharmaceuticals in Belgium is effective at preventing moderate to severe cases of the disease. The jab has been deemed safe with 66 percent efficacy and the FDA is likely to approve it for use in the U.S. within days.

The Ad26.COV2.S vaccine can be stored for up to three months in a refrigerator and requires a single shot, ...



more from M.T.M.

Biotech/COVID-19

Which Governments Ordered Johnson & Johnson's Vaccine?

 

Which Governments Ordered Johnson & Johnson's Vaccine?

Courtesy of Niall McCarthy, Statista

On Wednesday, U.S. regulators announced that Johnson & Johnson's Covid-19 vaccine being developed by its subsidiary Janssen Pharmaceuticals in Belgium is effective at preventing moderate to severe cases of the disease. The jab has been deemed safe with 66 percent efficacy and the FDA is likely to approve it for use in the U.S. within days.

The Ad26.COV2.S vaccine can be stored for up to three months in a refrigerator and requires a single shot, ...



more from Biotech/COVID-19

Digital Currencies

Crypto - It Is Different This Time

 

Crypto – It Is Different This Time

Courtesy of Howard Lindzon

?I have been astonished as you know by the growth of crypto.

I remember back in 2017 when I noticed that Stocktwits message volume on Bitcoin ($BTC.X) surpassed that of $SPY. I knew Bitcoin was here to stay and Bitcoin went on to $19,000 before heading into its bear market.

Today Bitcoin is near $50,000.

Back in November of 2020, something new started to happen on Stocktwits with respect to crypto.

After the close on Friday until the open of the futures on Sunday, all Stocktwits trending tickers turned crypto. The weekend messages on Stocktwits have increased 400 percent.

That has continued each weekend...



more from Bitcoin

Politics

What is fascism?

 

What is fascism?

A Donald Trump supporter wears a gas mask and holds a bust of him after he and hundreds of others stormed the Capitol building on Jan. 6, 2021. Roberto Schmidt/AFP via Getty Images

Courtesy of John Broich, Case Western Reserve University

Since before Donald Trump took office, historians have debated whether he is a fascist.

As a teacher of World War II history...



more from Politics

Chart School

The Fastest Money

Courtesy of Read the Ticker

The fast money happens near the end of the long trend.

Securities which attract a popular following by both the public and professionals investors tend to repeat the same sentiment over their bull phase. The chart below is the map of said sentiment.
 


 

Video on the subject.


 

Charts in the video



 



 



Changes in the world is the source of all market moves, to ...



more from Chart School

The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



more from Tech. Traders

Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



more from Lee

Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

http://www.insidercow.com/ more from Insider

Promotions

Free, Live Webinar on Stocks, Options and Trading Strategies

TODAY's LIVE webinar on stocks, options and trading strategy is open to all!

Feb. 26, 1pm EST

Click HERE to join the PSW weekly webinar at 1 pm EST.

Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

This week, we also have a special presentation from Mike Anton of TradeExchange.com. It's a new service that we're excited to be a part of! 

Mike will show off the TradeExchange's new platform which you can try for free.  

...

more from Promotions





About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

Learn more About Phil >>


As Seen On:




About Ilene:

Ilene is editor and affiliate program coordinator for PSW. Contact Ilene to learn about our affiliate and content sharing programs.