Investors Await Fed & Bernanke ‘Speak':
Is QE3 Coming?
Investors will focus on the Fed as the U.S. Fed’s policy meeting is scheduled for today which will be followed by a press conference by Federal Reserve Bank chairman Ben Bernanke. The Federal Open Market Committee statement is due at 12:30 p.m. EST and Federal Reserve Chairman Ben Bernanke’s press conference begins at 2:15 p.m. EST.
What Will The Fed Bank & Bernanke Say?
The Fed can’t deny the economy is weakening. The growth rate has stalled and the Fed may make the charge that a low interest rate environment won’t change anytime soon. This may make investors happy or results could be mixed. A statement from the Fed that the economy won’t be growing anytime soon could diminish sentiment but Bernanke’s Press conference could add more clarity.
Will the Fed mention QE3?
We don’t know if the Fed has any intention implementing another round of quantitative easing. If the Fed was even considering this- now would be the time to begin signaling as part of the ‘5 step process’ – (or has that already occurred?). If the Fed has no interest in another round of quantitative easing or ‘QE3’, it still might be a good idea to leave the option on the table.
Lookout for our follow up to the Fed’s meeting and Bernanke’s press release.