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.

 






  MENA News Headlines
 Jul 26 2014 - TAQA quits USD1.6b power plant deal with IndiaMENAFN
(MENAFN) Abu Dhabi National Energy (TAQA) backs off of a USD1.6 billion deal to buy two hydroelectric power plants from Indian Jaiprakash Power Ventures, Gulf Daily News reported.TAQA told Jaiprakash ...

 Jul 26 2014 - Dubai's Aramex profit up 12 percent in Q2MENAFN
(MENAFN) Dubai logistics firm Aramex reported a 12 percent rise in second-quarter net profit, driven by growing revenue in its core Gulf market, Gulf Daily News reported.According to a bourse filing, ...

 Jul 26 2014 - Qatar's Barwa second-quarter losses hit USD11.8mMENAFN
(MENAFN) Barwa Real Estate, Qatar's largest listed property developer, has registered an USD11.8 million net loss in the second quarter, Gulf Daily News reported.The second-quarter drop was compared ...

 Jul 26 2014 - KOC signs three USD2.34b worth contractsMENAFN
(MENAFN) The Kuwait Oil Company (KOC) signed contracts worth USD2.34 billion to build three collection centers in the company's areas of operations, QNA reported.KOC's first contract, worth USD685 ...

 Jul 26 2014 - McDonald's Japan halts sales of Chinese chicken after scandalArab News
(MENAFN - Arab News) KYO: McDonald's said Friday that its restaurants in Japan had stopped selling products made with chicken from China in a marked widening of a scandal that saw expired meat sold ...

 Jul 26 2014 - Two soldiers two cops die in Pakistan attacksArab News
(MENAFN - Arab News) LAMABAD: A bomb killed at least two Pakistani soldiers in the country's northwestern tribal district where the army is carrying out a major offensive against Taleban militants ...

 Jul 26 2014 - EU reaches preliminary deal on Russia economic sanctionsArab News
(MENAFN - Arab News) USSELS: European Union ambassadors reached a preliminary agreement on Friday to push ahead with hard-hitting economic sanctions against Russia over the Ukraine crisis but details ...

 Jul 26 2014 - West Africa Ebola death toll reaches 660: WHOArab News
(MENAFN - Arab News) NEVA:The death toll in West Africa's Ebola outbreak has risen to 660 with the number of cases surpassing 1000 the World Health Organization said Friday.WHO spokesman Paul Garwood ...

 Jul 26 2014 - WHO seeks humanitarian corridor to evacuate victims of Zionist barbarityArab News
(MENAFN - Arab News) NEVA: The World Health Organization (WHO) called on Friday for a humanitarian corridor to be set up in Gaza to allow aid workers to evacuate the wounded and bring in life-saving ...

 Jul 26 2014 - US dolls were meant to spread cheer not chillArab News
(MENAFN - Arab News) N CLEMENTE California: They sent a creepy feeling through several Southern California families but authorities say the person who left porcelain dolls on doorsteps didn't mean ...

more...


 






Google

Click to Apply

 
 

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