Fed Keeps Rate at 5.25%, Retains Focus on Inflation (Update1)
By Craig Torres
June 28 (Bloomberg) -- The Federal Reserve kept the benchmark U.S. interest rate at 5.25 percent and stressed that inflation is the greatest risk facing the economy.
``Readings on core inflation have improved modestly in recent months,'' the Federal Open Market Committee said today after a two-day meeting in Washington. ``However, a sustained moderation in inflation pressures has yet to be convincingly demonstrated.''
Officials have resisted calls for rate increases and cuts in the past year, helping the economy weather a housing slump and giving inflation a chance to recede of its own accord. While price gains have slowed, the statement suggests policy makers still envisage risks to price stability.
``The committee's predominant policy concern remains the risk that inflation will fail to moderate as expected,'' the Fed said. Turning to growth prospects, the Fed said the economy is ``likely to continue to expand at a moderate pace over coming quarters.''
Read the rest here
Since the announcement the market has bounced around with the Dow , S&P and Nasdaq intially up by a fair amount before pulling back. If inflation is still a problem, the chances of rate cuts later this year are very slim.
Showing posts with label Fed. Show all posts
Showing posts with label Fed. Show all posts
Thursday, June 28, 2007
Thursday, March 22, 2007
PRE MARKET
The bulls are back in the drivers seat. The strength across the board in Asia and Europe has been spectacular.
Initial jobless claims have dropped to a 2 month low.
Motorola dropped a bomb. Apparently the KRZR is not selling well.
Bernanke and company are still worried about growth and inflation. The fact they dropped any hint of rate increases i.e. tightening meant the bulls were off to the races.
I expect today will be another bullish day across the indices. We should be able to carry on from yesterdays momentum and the strength in overseas markets.
Initial jobless claims have dropped to a 2 month low.
Motorola dropped a bomb. Apparently the KRZR is not selling well.
Bernanke and company are still worried about growth and inflation. The fact they dropped any hint of rate increases i.e. tightening meant the bulls were off to the races.
I expect today will be another bullish day across the indices. We should be able to carry on from yesterdays momentum and the strength in overseas markets.
Wednesday, March 21, 2007
PRE MARKET
Markets across Asia and Europe are very bullish.
Shares in Morgan Stanley are surging after the company reports profits exceeding all estimates. Trading gains played a big factor. Could they have been short February 27 ?
FedEx reports first drop in earnings in three years. Winter storms and slowing US economy to blame. Shares are tumbling pre-market.
Could this be a contrarian indicator for a big rally ? Merrill Lynch survey shows investor bearishness at 7 month high.
Shares in Morgan Stanley are surging after the company reports profits exceeding all estimates. Trading gains played a big factor. Could they have been short February 27 ?
FedEx reports first drop in earnings in three years. Winter storms and slowing US economy to blame. Shares are tumbling pre-market.
Could this be a contrarian indicator for a big rally ? Merrill Lynch survey shows investor bearishness at 7 month high.
Based on the price movements in the US and overseas markets, it appears the bulls are making a comeback. Today will be an important one for the markets with the FED decision being announced at 2:15 ET. Rates are expected to stay the same. I believe the reaction of the markets after 2:15 ET will be crucial.
Tuesday, March 20, 2007
MARKET RECAP
Once again the bulls ruled except for a slight hiccup around midday, stirred up by King Hals weak profit forecast.
The S&P 500 had its best 2 day gain since last August.
Solid housing starts announced today were the major factor in the market advance.
Palm was up on takeover speculation. The new Treo smartphone has been getting rave reviews and appears to be a product that can put a dent in the Blackberry.
Oracle and Adobe are two companies that are reporting solid profit growth after the bell. Shares in both companies are up in after hours.
The FED announcement is tomorrow. Rates are expected to be kept unchanged. It appears the bulls have the upper hand for now but, we all know that a 2 day 180 point rally can be wiped out by the likes of 400+ and 242 point drops that we have seen in the last 3+ weeks.
The S&P 500 had its best 2 day gain since last August.
Solid housing starts announced today were the major factor in the market advance.
Palm was up on takeover speculation. The new Treo smartphone has been getting rave reviews and appears to be a product that can put a dent in the Blackberry.
Oracle and Adobe are two companies that are reporting solid profit growth after the bell. Shares in both companies are up in after hours.
The FED announcement is tomorrow. Rates are expected to be kept unchanged. It appears the bulls have the upper hand for now but, we all know that a 2 day 180 point rally can be wiped out by the likes of 400+ and 242 point drops that we have seen in the last 3+ weeks.
MARKET UPDATE
The bulls are running wild today. The home construction news was a boost to the market though I hardly believe that the bottom in housing is in.
In retrospect I feel foolish selling a good chunk of my ultra bull ETFs - QLD etc while adding to the ultra shorts QID etc. Miraculously despite my fund being biased to the bearish side I am actually in the green today with gains in GLD - gold ETF while some of my long positions have been running wild such as SNDK and COGT. I figure if the FED continues to pump liquidity into the system, gold will benefit and thus GLD is a good hedge to my ultra short positions.
On days like these I am Jacks smirking revenge .....
In retrospect I feel foolish selling a good chunk of my ultra bull ETFs - QLD etc while adding to the ultra shorts QID etc. Miraculously despite my fund being biased to the bearish side I am actually in the green today with gains in GLD - gold ETF while some of my long positions have been running wild such as SNDK and COGT. I figure if the FED continues to pump liquidity into the system, gold will benefit and thus GLD is a good hedge to my ultra short positions.
On days like these I am Jacks smirking revenge .....
PRE MARKET
Housing starts have been stronger than expected which is boosting the futures.
ICSC-UBS store sales shows increases in part due to warmer than expected weather but, warns that high gas prices are hurting the consumer.
The Asian markets are relatively strong this morning but Europe is considerably weak .
The Fed starts their 2 day meeting today in which they are expected to keep interest rates the same.
I expect the US equity market to open higher but weaken throughout the trading day.
ICSC-UBS store sales shows increases in part due to warmer than expected weather but, warns that high gas prices are hurting the consumer.
The Asian markets are relatively strong this morning but Europe is considerably weak .
The Fed starts their 2 day meeting today in which they are expected to keep interest rates the same.
I expect the US equity market to open higher but weaken throughout the trading day.
Friday, January 05, 2007
WEEK 1 2007
1 week down (almost) 51 to go. Where does this put us ? What strategy does one pursue in the coming weeks ? How does one preserve capital yet maximize gains and etch out absolute returns in the double digits ? If I were not looking for double digit returns I would not hesitate to switch to the money markets at 5%. Iceland is offering me 13% for my money. The Chinese Yuan is a safe bet assuming the continuation of appreciation vs the US Dollar. The Euro has broken overhead resisitance in recent months and is heading for all time highs vs the USD. It looks to be a good safe haven for capital. I like Gold too in the form of Goldtrust Shares as it settles along support.
Job growth rose unexpectedly which has dampened investors expecting a Fed rate cut.If the economy continues to show strength , a rate raise would not surprise me. When was the last time the Fed lowered rates into a rising stock market ? I don't know but all I do know is that when the Fed does decide to cut rates, it will be to the backdrop of investors fleeing the US equity markets.
Job growth rose unexpectedly which has dampened investors expecting a Fed rate cut.If the economy continues to show strength , a rate raise would not surprise me. When was the last time the Fed lowered rates into a rising stock market ? I don't know but all I do know is that when the Fed does decide to cut rates, it will be to the backdrop of investors fleeing the US equity markets.
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