The possibility that the Federal Reserve could
finally start to trim its extraordinary stimulus for the economy
could make this week an explosive one for financial markets.
Though the odds still point to no major policy
change when U.S. central bankers meet December 17-18, most of the
recent domestic economic data suggest the beginning of the end of
their massive bond-buying program is coming sooner than later.
Markets to Fed: It’s game time, baby! ..
Ben Bernanke, give it to us straight — when
does the taper begin?
Why the Federal Reserve
must taper quantitative easing before Christmas
Wall Street still uses QE to play global markets, but recovery – and risks – are calling time on this questionable experiment
Wall Street still uses QE to play global markets, but recovery – and risks – are calling time on this questionable experiment
Just do it. That’s
the message for the Federal Reserve as it decides this week whether
its Christmas present to the American people should be to start
scaling back on the $85bn (£52bn) in newly minted electronic money
it is chucking at the American economy each month.
Federal Reserve chairman Ben Bernanke and his
successor Janet Yellen. March 2014 may be a likely time start to
scale back QE, there is every reason to start immediately.
Photograph: Alex Wong/Getty Images
Main Street has not done so well out of the
Fed’s quantitative easing programme. Indeed, by helping to generate
speculative increases in commodity prices QE has squeezed disposable
incomes and done as much harm as good.
…
In practice, this means that the Fed is worried
about throwing good money after bad, worried that QE is distorting
investment decisions and leading to the misallocation of capital, and
worried about the losses it would make on behalf of the American
taxpayer if there happened to be a sharp fall in the price of the
bonds and securities it has bought in the past five years.
What exactly is quantitative easing?
The Federal Reserve is in the spotlight for its
move to slow down its $85 billion a month of bond purchases, designed
to pump money into the economy and nurture the recovery. USA TODAY’s
Tim Mullaney explains the details.
• What is quantitative easing?
Also known as QE, it’s the technical term for
the Federal Reserve’s policy of buying bonds and other assets in
order to push more money into the economy.
The most recent strategy, called QE3, had the
Fed buying $85 billion of bonds every month. The bank has said it
will phase out those purchases as the economy improves.
• Why did the Fed do it?
The Fed hoped to drive up the supply of money
available for loans, driving down long-term interest rates so more
people would buy and build homes and invest in businesses. With
short-term interest rates already near zero, the central bank’s
traditional tool of lowering rates couldn’t be pushed any farther.
http://www.usatoday.com/story/money/business/2013/09/18/federal-reserve-quantitative-easing/2831097/
Fed chief’s exit may spell the end for US
economic stimulus
Ben Bernanke’s quantitative easing scheme
appears to have done the trick. But when will the Federal Reserve
pull the plug?
Mark Zandi of Moody’s Analytics said it
looked certain that QE would be cut soon, but thought it more likely
to happen under the tenure of Bernanke’s successor, Janet Yellen.
The programme had largely worked: the difficulty the Fed now faced
was how to unwind it, he said.
“The biggest risk now is, can they bring this
to an end gracefully?” he said. “Janet Yellen is going to own
that. She should start it.”
Finally taper time? Fed meeting to take
center stage this week for investors..DO YOU THINK THE WYLL ANNOUNCE
THE TAPER THIS WEEK…I SAY YES
U.S. stock index futures moved higher at the
start of the week, ahead of a Wednesday meeting of Federal Open
Market Committee (FOMC) which some believe could culminate in the
start of the slowing down of the U.S. Federal Reserves’s $85
billion monthly bond-buying program.
After a favorable employment report for
November, firm retail sales, and the establishment of a bipartisan
budget proposal, many economists and analysts see a significant
chance that the U.S. Federal Reserve could reduce its stimulus
program at this week’s meeting.
“We now look for the Fed to do something
meaningful at the December 18 meeting,” wrote Michael Moran at
Daiwa Capital Markets America in a note. “We view the announcement
of a reduction in asset purchases as the most likely outcome; absent
this, we expect some type guidance on the FOMC’s plans for the
effort.”
The last chapter of the Bernanke era
Busy week of data, but FOMC meeting in the
spotlight
On Monday, he will appear alongside Alan
Greenspan and Paul Volcker to celebrate 100 years of the existence of
the institution that each of them has led.
By Friday, depending on the Senate schedule to
confirm President Obama’s choice as his successor — Fed Vice
Chairwoman Janet Yellen — Bernanke may be out of a job.
“What’s the rush,” asks Steve Ricchuito,
chief economist for Mizuho Securities USA, who’s one of the more
pessimistic voices of Wall Street economists. “You’ve tried to
back away for how many years, and each time you’ve made a mistake.
You have no inflation pressure, and you have very little risk from
letting [QE3] run for one more quarter.”
Investors
are bracing for the Federal Reserve to reduce its market-boosting
stimulus as soon as the coming week, highlighting confidence that the
economy has healed enough to permit the central bank to safely pare
back its bond buying.
I always find it so odd they FIGHT over the
Budget that will pay off only $10 Billion over 10 years…… and
yet… The Fed Reserve and Bernanke can continue to print $88 Billion
a month with NO congress VOTES..
I see it is ALL smoke and Mirrors for the
masses…
A big game… and I am sure the powers behind
those powers are pulling the strings…
How high up is George Soros??
He collapse other currencies in the past.
This is how the whole scam works:
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