Quotes: MENA   Enter Symbol: NewsLetter: Search: advanced

US- Jittery markets await clarity from Federal Reserve board meeting  Join our daily free Newsletter

MENAFN - The Peninsula - 17/06/2013
No. of Ratings : 0
Add to Mixx!

(MENAFN - The Peninsula) The Federal Reserve's policy board meets tomorrow to review the economy and its stimulus program, and markets are looking for one thing: clarity.

After weeks of tumultuous stock market volatility and a sharp fall in bond prices, bankers, investors and anyone else with a vested interest are waiting to hear: Is the Fed really about to reel in its quantitative easing programme?

If so, could that be within months? Or will the US central bank wait for stronger economic growth to take that step?

The markets eagerly await any meeting of the Federal Open Market Committee, which sets the benchmark US dollar interest rate and, at the moment, continues to hold long-term rates down with its 85bn-a-month QE bond buying programme.

But much more rides on this FOMC meeting tomorrow and on Wednesday, because over the past month billions of dollars have been bet on an aggressive interpretation of comments by Fed chief Ben Bernanke that the Fed is about to turn the corner on five years of stimulus.

The belief that it will start tapering its bond purchases within months has sent bond prices plummeting and interest rates shooting up, and that, in turn, has pulled stocks lower, after they reached new records fuelled by the Fed's easy money policy.

Yet US economic growthlowed slightly in the spring and remains at risk to slower growth around the world, and with the government slashing spending, Fed stimulus is still needed, economists say.

The Fed's guideposts, unemployment and inflation, remain far off their target for a "normalized" fiscal policy. The unemployment rate is hovering at 7.6 percent - the target is 6.5 percent - and inflation is well below the two percent level the FOMC sees would be healthy.

Most analysts say that means that the FOMC is likely to stay the course in this meeting.

But how Bernanke hones his hints on future policy in a post-meeting press conference on Wednesday will be key.

"We do not expect Mr Bernanke to yet show confidence that the time to taper QE is near," said Carl Riccadonna at Deutsche Bank. "But the most important aspect of his media Q&A will be whether he signals that a second-half taper remains plausible."

The bond market has decided. The yield on the 10-year Treasury bond shot up from 1.63 percent at the beginning of May to 2.23 percent in the past week, and the 30-year jumped from 2.82 percent to 3.38 percent.

Partly behind that were the seeming at-odds comments by Bernanke to Congress on the issue on May 22.

He first warned that tightening monetary policy now could stall the US recovery.


The Peninsula

  MENA News Headlines
 Nov 27 2015 - Qatar- Buoyed by strong buying, QSE snaps four days bearish spellGulf Times
(MENAFN - Gulf Times) Snapping four days of bearish spell, Qatar Stock Exchange gained a marginal 11 points, mainly on buying in the transport, realty and insurance stocks.Domestic institutions ...

 Nov 27 2015 - Saudi Aramco plans to invest more in Indonesian oil sectorGulf Times
(MENAFN - Gulf Times) Saudi Aramco is looking for further investment opportunities in Indonesia's downstream refining and petrochemicals industry, the company's CEO said yesterday, after initiating a ...

 Nov 27 2015 - Despite $500bn loss, Opec seen holding the line at Vienna meetGulf Times
(MENAFN - Gulf Times) It'll take more than $40 crude to make Opec change its mind, analysts said before the group's December 4 meeting in Vienna.In the year since the Organisation of Petroleum ...

 Nov 27 2015 - Qatar- WTCC season finale set to light up Losail circuitGulf Times
(MENAFN - Gulf Times) This time at the Losail International Circuit, the screeching wail of the MotoGP and the WSBK motorcycles will be replaced by the guttural exhaust note of the touring cars ...

 Nov 27 2015 - UK- Time to start bombing IS, Cameron tells lawmakersGulf Times
(MENAFN - Gulf Times) Prime Minister David Cameron told lawmakers yesterday it was time to join air strikes against Islamic State militants in Syria, saying Britain cannot "subcontract its security ...

 Nov 27 2015 - Blogger case still before Saudi courts: ministerGulf Times
(MENAFN - Gulf Times) The case of Saudi blogger Raif Badawi, whose flogging sentence created worldwide outrage, is still before the courts, Foreign Minister Adel al-Jubeir said on Thursday."The legal ...

 Nov 27 2015 - Palestinian hits Israeli soldiers with car in West Bank, shot deadGulf Times
(MENAFN - Gulf Times) A Palestinian rammed his car into Israeli soldiers at a bus station in the occupied West Bank Friday before being shot dead, police said. "A Palestinian car hit two Israelis ...

 Nov 27 2015 - Envoy meets head of Qatar-EU Friendship GroupGulf Times
(MENAFN - Gulf Times) Qatar's Ambassador to Belgium and head of Qatar's mission to the European Union, HE Sheikh Ali bin Jassim al-Thani, met at the European Parliament the head of the ...

 Nov 27 2015 - Qatar- Traffic diversion for 2 years in Al Rayyan areaGulf Times
(MENAFN - Gulf Times) A traffic diversion for almost two years will come into effect on Gharrafat Al Rayyan Street between Gharrafat Al Rayyan Roundabout and Qatar Foundation (Civil Defence) from ...

 Nov 27 2015 - KSA's Aramco plans to spend big-cash in IndonesiaMENAFN
(MENAFN) Saudi Aramco seeks further investment chances in Indonesia's downstream refining and petrochemicals industry, amid its recent USD5.5 billion development to enhance Indonesia's biggest ...




Click to Apply


Middle East North Africa - Financial Network

MENAFN News Market Data Countries Tools Section  

Middle East North Africa - Financial Network

Main News
News By Industry
News By Country

Islamic Finance News
Private Equity News

How-To Guides
Technology Section

Travel Section

Search News

Market Indices
Quotes & Charts

Global Indices
Arab Indices


Oil & Energy

Currencies Cross Rates
Currencies Updates
Currency Converter

USA Stocks
Arab Stocks

Saudi Arabia 

Economic Calendar
Financial Glossary

Financial Calculators

RSS Feeds [XML]

Corporate Monitor


Real Estate
Submit Your Property

Arab Research
Buy a Research

Press Releases
Submit your PR

Join Newsletters

© 2014 menafn.com All Rights Reserved.  Terms of Service | Privacy Policy | Contact Us | Advertise | About MENAFN | Career Opportunities | Feedback | Help