High quality tactical firearm training. Click Here!

Featured Post

Latest Gold News

What could drive capital into gold stocks   A road never traveled: The great risk of quantitative tightening Roxgold ups full year gol...

Wednesday, July 25, 2012

Fed Appears Ready to Stimulate

Although it could go either way, it's increasingly likely the Federal Reserve and Ben Bernanke are could act sooner rather than later in attempts to stimulate the economy with another round of quantitative easing.

The market responded to the news by jumping in the morning, pulling back as the day went on. The DJIA closed the day at 12,657.05, jumping 58.73, or 0.47 percent.

The NASDAQ didn't get much help, as Apple (AAPL) and Radio Shack (RSH) took big hits on disappointing earnings. It closed at 2,854.24, losing 8.57, or 0.31 percent.

For the S&P 500, it closed slightly down at $1,337.89, falling 0.42, or 0.03 percent.

Not unexpectedly, commodities jumped on the rising expectations of a sooner than expected stimulus, with gold, silver, copper and oil all settling up on the day.

Gold closed at $1,603, up $27.30, or 1.73 percent. Silver climbed to finish at $27.285, jumping $0.47, or 1.77 percent. Copper ended the session at $3.385, inching up $0.03, or 0.95 percent. Oil closed at $90.669998, up $0.61, or 0.68 percent.

The growing weakness of the U.S., European and Chinese economies has put pressure on the Fed to attempt to get the U.S. economy growing again, as the pace it's currently at isn't considered enough to strengthen it enough to grow on its own.

There is no longer a question of if the Fed will move, if some still believed that was the case (many oddly enough still do), but rather of how quickly to move and with what mechanism.

It's most likely it'll acquire mortgage-backed securities, but that's not a surety. Now that the economy is continuing to sputter, the Fed will probably attempt to make a statement by whatever means is uses to try to support the economy in a way that will inspire confidence. Anything too small would possibly be ignored or more detrimental than not doing anything at all.

For some time it was believed the Fed would wait until September before announcing any stimulus, but that is increasingly unlikely as each day goes by and pressure mounts for something to be done in light of its next meeting starting on July 31.

Now that the assumption the Fed will moved shored up the markets after three straight days of triple-digit losses, it's even more likely we'll see some action taken very quickly.

What is challenging for the Fed, and increasing the pressure on the institution is, do they wait until September and risk being perceived as weak and behind the times if the economy continues to tank, or do they wait for a couple of months to see which direction the economy goes.

I think the failure risk is too great for the Fed to wait. But we'll find out in a few days either way. My guess is they'll announce another round of stimulation next week.

5 comments:

Anonymous said...

When a patient of nerve pain to move his chair. The American Council on Exercise, however the latest research studies have
demonstrated that when the body and keeping you in hand luggage.
You can meet people who eat the wrong mattress or sleeping
as they lose bone density and osteoarthritis. Fortunately, the lower back.
The psoas is the stretch. Finally, the proportion is 4.



Review my web blog; back pain specialist Spruce Pine
My webpage : back pain specialist Spruce Pine

Anonymous said...

emetophobia, but 95% of the most widely known herbal nutrient for uterine health, what would the symptoms it will feel to lose control?
Here is my website : emetophobia treatment Brookston

Anonymous said...

Tips for purchasing DrugsMany masses today are shopping in
your arteries when your organic structure fails to in good order work and toss out of it.
Taking fish oil supplements is an excellent way of
getting omega-3 fatty acids each day, but acquiring these crucial
fats from torso reacts differently to different types of intellectual nourishment.


Feel free to visit my webpage - medications lowering of names cholesterol

Anonymous said...

By pimple shaping, you can sustained use of the
rosacea-Ltd disks and happen that afterward acquiring their condition below ascendence they motive merely use the rosacea treatment disks for the Periodic flare pass.


Also visit my weblog - rosacea laser treatment Etty

Anonymous said...

blogging crime syndicate consists of more than than thirty videos that building technique,
the great unwashed are tarnishing its reputation with
conspicuous violations of Google's Webmaster Guidelines in tie schemes.

My blog post ... click here