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
 Jan 29 2015 - HH the Emir Receives Phone Call from Ban Ki-moonQatar News Agency
(MENAFN - QNA) HH the Emir Sheikh Tamim bin Hamad Al-Thani on Thursday received a phone call from the United Nations Secretary-General, Ban Ki-moon, during which he thanked HH the Emir on the ...

 Jan 29 2015 - Consumer spends on pharma products to increase to Dh5.03b by 2020Khaleej Times
(MENAFN - Khaleej Times) Dubai € Consumer expenditure on pharmaceutical products, medical appliances and equipment in the UAE has experienced a strong increase and is forecast to be valued around ...

 Jan 29 2015 - UAE- Time to put cyber security on top priorityKhaleej Times
(MENAFN - Khaleej Times) Kaspersky lab solutions block millions of attacks across the globe, which clearly indicates that cyber criminals are smart, but not smarter than security providers.This was ...

 Jan 29 2015 - Indian business council honours Emirati businessmenKhaleej Times
(MENAFN - Khaleej Times) Dubai - The Indian Business and Professional Council (IBPC) hosted a reception on the occasion of the 66th Republic Day of India at the Oberoi Hotel, Business Bay, on Sunday. ...

 Jan 29 2015 - UAE, Canada discuss ways to boost tradeKhaleej Times
(MENAFN - Khaleej Times) Abu Dhabi - Abdullah Al Saleh, Undersecretary of the Ministry of Economy for Foreign Trade, received a Canadian delegation led by Martin Zablocki, CEO of the Canadian ...

 Jan 29 2015 - Emirates NBD facilitates Stanbic in $85 million loan facilityKhaleej Times
(MENAFN - Khaleej Times) Al Ahli Bank of Kuwait and Standard Chartered Bank joined the transaction as mandated lead arrangers while Al Khalij Commercial Bank and The Commercial Bank of Qatar ...

 Jan 29 2015 - NBAD profit jumps 28% in 2014Khaleej Times
(MENAFN - Khaleej Times) Abu Dhabi - A strong growth in incomes from interest and non-interest based revenues bolstered the National Bank of Abu Dhabi (NBAD) profits to Dh1.372 billion in the quarter ...

 Jan 29 2015 - UAE pharma spend to hit Dh5 billion by 2020Khaleej Times
(MENAFN - Khaleej Times) It is also forecasted to increase at a compound annual growth rate (CAGR) of about 9.78 per cent from 2014 to 2020 as, by then, the value of consumer expenditure on ...

 Jan 29 2015 - Parents happy with children's educationKhaleej Times
(MENAFN - Khaleej Times) Abu Dhabi: A survey by the Abu Dhabi Education Council (Adec) has revealed that parents across the emirate are satisfied with their children's schools. The education ...

 Jan 29 2015 - Customers continue winning at Malabar Gold 1amp Diamonds FestivalArab News
(MENAFN - Arab News) Customers continue to win at Malabar Gold & Diamonds' ongoing gold and diamond festival.The jewelry retailer's 4th edition of Malabar Gold & Diamonds Festival in the GCC ...

more...


 






Google

Internatinal Property Show

 
 

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