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 growth slowed 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
 May 22 2015 - Arab info. ministers agree to promote culture of toleranceKuwait News Agency (KUNA)
(MENAFN - Kuwait News Agency (KUNA)) The Arab information ministers' council concluded its 46th session on Thursday with a final statement stressing the important role of mass media in promoting the ...

 May 22 2015 - Kuwait, Peru eye closer diplomatic ties, cooperationKuwait News Agency (KUNA)
(MENAFN - Kuwait News Agency (KUNA)) Head of the Kuwait's fourth parliamentary friendship committee MP Yousef Al-Zalzalah met with President of the Congress of the Republic of Peru Ana Maria ...

 May 22 2015 - Kuwaiti-Moroccan ties based on shared values - OfficialKuwait News Agency (KUNA)
(MENAFN - Kuwait News Agency (KUNA)) Advisor to Kuwait's Amiri Diwan Mohammad Difullah Sharrar said his country and the Kingdom of Morocco share identical cultural and historical values that formed a ...

 May 22 2015 - Kuwaiti play wins gold at Free Theater FestivalKuwait News Agency (KUNA)
(MENAFN - Kuwait News Agency (KUNA)) The Kuwaiti play 'Hawel Marrah Okhra' (Try Again) won the golden award of the 10th Free Theater Festival on Thursday evening.The silver and bronze medals went to ...

 May 22 2015 - Kuwaitis proud of nat'l pavilion at Expo Milan 2015Kuwait News Agency (KUNA)
(MENAFN - Kuwait News Agency (KUNA)) The spouse of Kuwait's General Consul in Milan and North Italy, Abdul-Nasser Bou-khaddour, praised here role of the Kuwaiti pavilion organizers in Expo Milan ...

 May 22 2015 - Kuwaiti Jiu Jitsu team participates in West Asia tournamentKuwait News Agency (KUNA)
(MENAFN - Kuwait News Agency (KUNA)) Kuwait's Brazilian Jiu Jitsu team will head to Beirut, Lebanon on Thursday to take part in the three-day West Asia tournament.The Kuwaiti team includes seven ...

 May 22 2015 - Kuwait ranks 4th at Fazza wheelchair basketball tourneyKuwait News Agency (KUNA)
(MENAFN - Kuwait News Agency (KUNA)) Kuwait's national team lost their last game to Morocco's 44-71 at the the Seventh Fazza International Wheelchair Basketball Tournament, Dubai 2015, Wednesday ...

 May 22 2015 - OCA cancels Sri Lanka's hosting of Asian Youth Games 2017Kuwait News Agency (KUNA)
(MENAFN - Kuwait News Agency (KUNA)) President of the Olympic Council of Asia (OCA) Sheikh Ahmad Al-Fahad Al-Sabah announced Thursday that the Council has withdrawn the 3rd Asian Youth Games in 2017 ...

 May 22 2015 - Chinese peacekeeping troops head for LebanonKuwait News Agency (KUNA)
(MENAFN - Kuwait News Agency (KUNA)) A new batch of Chinese peacekeeping troops and a 30-member medical team left China for Lebanon Tuesday for peacekeeping mission, state-run China Central ...

 May 22 2015 - Seven airstrikes in Syria, 14 in Iraq target ISIL - coalitionKuwait News Agency (KUNA)
(MENAFN - Kuwait News Agency (KUNA)) Coalition military forces continued to attack ISIL, conducting seven airstrikes in Syria and 14 in Iraq, the Combined Joint Task Force announced on Tuesday."In ...

more...


 






Google

 
 

Middle East North Africa - Financial Network

MENAFN News Market Data Countries Tools Section  
 

Middle East North Africa - Financial Network
Arabic MENAFN

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

Commodoties

Oil & Energy

Currencies Cross Rates
Currencies Updates
Currency Converter

USA Stocks
Arab Stocks
 

Algeria 
Bahrain 
Egypt 
Iraq
Jordan 
Kuwait 
Lebanon
Morocco 
Oman 
Palestine
Qatar 
Saudi Arabia 
Syria
Tunisia 
UAE 
Yemen

Weather
Economic Calendar
Financial Glossary


Financial Calculators

RSS Feeds [XML]

Corporate Monitor

Events

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