Quotes: US 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
 Sep 15 2014 - UN Calls for More Funding to Humanitarian Efforts in IraqQatar News Agency
(MENAFN - QNA) United Nations Under-Secretary-General for Humanitarian Affairs and Emergency Relief Coordinator Valerie Amos said Monday that the international community must allocate more finances ...

 Sep 15 2014 - Allawi Urges Iraqi Government to Devolve Power to ProvincesQatar News Agency
(MENAFN - QNA) Iraq's Vice President Iyad Allawi has urged the federal government to give wider powers to the provinces. In a media statement Allawi said, "We need to create a new political ...

 Sep 15 2014 - Summary of Sunday Local News ReleasedQatar News Agency
(MENAFN - QNA) A summary of local news released Sunday by Qatar News Agency. - HH the Emir Sheikh Tamim bin Hamad Al-Thani met here today at his Emiri Diwan Office with Lebanese Prime Minister ...

 Sep 15 2014 - Summary of Sunday Local News - 1Qatar News Agency
(MENAFN - QNA) - Prime Minister of the Lebanese Republic, Tammam Salam, left Doha this afternoon concluding a visit to Qatar. The Lebanese Premier and the accompanying delegation were was seen off ...

 Sep 15 2014 - Summary of Sunday Local News- 2Qatar News Agency
(MENAFN - QNA) - The State of Qatar participates in the Global Infrastructure Conference due to be held in the Republic of Korea on 17 -19 September. Qatar's delegation is headed by Minister of ...

 Sep 15 2014 - Woman incarnate Brigitte Bardot hits 80Khaleej Times
(MENAFN - Khaleej Times) The real life Bardot may have long abandoned the limelight but for legions of fans she is still a feminist idol Carefree sensuality oozed from every pore as Brigitte Bardot ...

 Sep 15 2014 - My whole life is a holiday: Salman KhanKhaleej Times
(MENAFN - Khaleej Times) Salman Khan opens up about his charitable side and why he makes a conscious effort to repeat his clothes.Salman Khan made a fleeting visit to Dubai last Wednesday to promote ...

 Sep 15 2014 - Comparisons are really unfair: Priyanka ChopraKhaleej Times
(MENAFN - Khaleej Times) Now a section of people are talking about the disparity between the incomes of Priyanka and Mary Kom.Indian Bollywood film actress Priyanka Chopra reacts during a promotional ...

 Sep 15 2014 - The Simpsons toast 25 years with songs and starsKhaleej Times
(MENAFN - Khaleej Times) The program featured music stars and reminiscences from TVs longest-running scripted show.In this photo provided by the Hollywood Bowl Yeardley Smith Hank Azaria and Nancy ...

 Sep 15 2014 - Iconic Davis Cup silverware to go on display at The Dubai MallKhaleej Times
(MENAFN - Khaleej Times) Organisers have called upon sports lovers to make use of this unique opportunity of having one of the oldest sporting trophies right here.Dubai — Tennis aficionados 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

IPO News
Islamic Finance News
Private Equity News

How-To Guides
Technology Section

Travel Section

Search News

Market Indices
Quotes & Charts

Global Indices
Arab Indices

US Markets Details

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
Investment Game
Economic Calendar
Financial Glossary

My MENAFN
Portfolio Tracker

Voting

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


 
© 2000 menafn.com All Rights Reserved.  Terms of Service | Privacy Policy | Contact Us | Advertise | About MENAFN | Career Opportunities | Feedback | Help