FOMC 21st Sep 2010

Discussion in 'Trading' started by Dogfish, Sep 21, 2010.

  1. Dogfish


    Any thoughts boys and girls? We got 2 hours to kill.

    Highly likely a non-event but "shock and awe" does have the word "shock" in it so I feel obliged to be here.

    "The FOMC meeting might pass without too much fuss, even if surprises are
    never excluded. In its Jackson Hole speech, Bernanke said that the conditions for
    stronger growth in 2011 were still fulfilled. He also said that the FOMC had tools to
    address deflation risks (which he didn’t see) or a significant deterioration of conditions
    in the economy and labour market. He made clear that the Fed would not be
    afraid to use these tools (more QE) if needed. Since the speech, the dataflow was
    better-than-expected and suggested stabilization in the economy. Given the
    opposition to further measures by a number of regional Fed governors and Bernanke
    probably looking for a broad agreement on future policy changes inside his FOMC
    Committee, we don’t expect the Fed to announce new measures today. Acting now
    might unsettle markets as investors might see the Fed action as evidence the
    economic outlook is dire or deflation risks higher than thought. We suspect the
    Fed wants to avoid such an interpretation. So, the FOMC statement might be broadly
    similar to the August one. No big changes in the economic and inflation assessment,
    confirmation that rates may remain at their exceptional low level for an extended period
    of time and that the coupon receipts and the maturing MBS paper will be reinvested
    in US Treasuries."
  2. I say we see the shock and awe. Target rates established on long-term debt.
  3. ptrjon


    I think we may see added stimulus- but there's no way to know until the announcement...
  4. Tsing Tao

    Tsing Tao

    we'll see the same statement as before, with the addition of more concern about economic data. "extended period" will remain in the language.

    there will be no new qe.
  5. Hey, I didn't know the Fed put out stimulus! [​IMG]
  6. Dogfish


    Every bank report I've been reading says too early, likes of BofaMerrill don't think it will arrive until January.
    It only seems to be CNBC getting excited about it.
    I think I'd have to say no show on this occasion but will be on the trigger.
  7. S2007S


    Market doing nothing until the announcement.

    Bubble ben bernanke is going to recycle the same nonsense he has been recycling for the last year, nothing new coming out of this meeting, rates will be 0% for the next 2 years.
  8. Larson

    Larson Guest

    annoucement will be irrelevant by the end of the week. Fed is out of ammo, and wants to give appearances that they are in control. Gold is currently saying they are not. What a mess they have made starting with Greenspan.
  9. S2007S


    Market is just waiting for this announcement, it also feels like it still wants to rally hard after the announcement.

    Market going to be extremely volatile in the next 5 minutes.
  10. Tsing Tao

    Tsing Tao

    rumor about fed pulling interest on excess reserves
    #10     Sep 21, 2010