Rick Santelli demanded to know this morning what Bernanke is so afraid of-why won't it wind down its unprecedented bond buying?
http://www.zerohedge.com/news/2013-06-19/rick-santelli-rages-what-bernanke-so-afraid
This afternoon, Santelli got his answer-who knew it would be this quick?
"Stocks accelerated their selloff in the final hour of trading to end near session lows Wednesday, after the Federal Reserve said it will maintain its bond-buying program, though Chairman Ben Bernanke hinted that the FOMC plans to moderate purchases later this year."
"They don't tie themselves officially into anything but it's clearly what they're going to do," said Jim Paulsen, chief investment strategist at Wells Capital Management. "I think he's more clearly said today than at any other time that he's going to taper before the end of the year, and there's a possibility he could be done by the middle of next year."
http://www.cnbc.com/id/100827876
The Dow ended up down 200 points, a 1 percent drop. We live in a strange world right now where the market sometimes sells seemingly good news in the fear that the Fed will end the bond buying sooner rather than later. Bad news, on the other hand is often a buy as it means it will continue.
"Fed policymakers said in a statement the Fed would keep buying $85 billion in bonds a month and modestly raised its expectations for GDP growth for 2014, from 2.9 to 3.4 percent to 3.0 percent to 3.5 percent. But in a press conference, Bernanke said if the economy continues to improve the asset-purchasing program could start winding down towards the end of 2013 and wrap up in 2014.
Interest rate hikes however, he said, are a separate issue and "still far in the future."
"Wall Street traders expected exactly what the Fed delivered today: slight forecast improvements while providing a crutch to continue with its aggressive monetary policy measures," said Todd Schoenberger, managing partner at LandColt Capital. "Interestingly, the language in the statement provides a mulligan on the recent 'tapering' comments. But Wall Street has already 'traded out' those statements and bulls will now focus on the comments about the likelihood of an increase in rates not occurring until 2015. Keeping rates low indicates a continued bull run in equities for the foreseeable future."
"Treasury prices fell after the announcement, with the benchmark 10-year yield hitting its highest level since 2011."
Of course, it's not clear these days whether falling Treasury prices are a bullish or bearish sign.
Meanwhile the market is also concerned over the 'uncertainty' about who Obama will appoint as the next Fed Chairman.
"President Barack Obama added to uncertainty about Fed policy on Tuesday, when he gave a press interview in which he suggested that Bernanke would leave at the end of his term in January. Obama said Bernanke had "already stayed a lot longer than he wanted or he was supposed to."
But Bernanke refused to address questions about his future at the central bank."
"(Read More: Bernanke Is 'the Ultimate Lame Duck': Langone)"
"Fed Vice Chairman Janet Yellen is widely seen as the leading candidate to replace Bernanke, but there are other possibilities, including former Treasury Secretary Larry Summers. Yellen's views are viewed as similar to those of Bernanke."
I wonder if the fiscal multiplier is still zero according to Sumner if Yellen is appointed.
http://www.zerohedge.com/news/2013-06-19/rick-santelli-rages-what-bernanke-so-afraid
This afternoon, Santelli got his answer-who knew it would be this quick?
"Stocks accelerated their selloff in the final hour of trading to end near session lows Wednesday, after the Federal Reserve said it will maintain its bond-buying program, though Chairman Ben Bernanke hinted that the FOMC plans to moderate purchases later this year."
"They don't tie themselves officially into anything but it's clearly what they're going to do," said Jim Paulsen, chief investment strategist at Wells Capital Management. "I think he's more clearly said today than at any other time that he's going to taper before the end of the year, and there's a possibility he could be done by the middle of next year."
http://www.cnbc.com/id/100827876
The Dow ended up down 200 points, a 1 percent drop. We live in a strange world right now where the market sometimes sells seemingly good news in the fear that the Fed will end the bond buying sooner rather than later. Bad news, on the other hand is often a buy as it means it will continue.
"Fed policymakers said in a statement the Fed would keep buying $85 billion in bonds a month and modestly raised its expectations for GDP growth for 2014, from 2.9 to 3.4 percent to 3.0 percent to 3.5 percent. But in a press conference, Bernanke said if the economy continues to improve the asset-purchasing program could start winding down towards the end of 2013 and wrap up in 2014.
Interest rate hikes however, he said, are a separate issue and "still far in the future."
"Wall Street traders expected exactly what the Fed delivered today: slight forecast improvements while providing a crutch to continue with its aggressive monetary policy measures," said Todd Schoenberger, managing partner at LandColt Capital. "Interestingly, the language in the statement provides a mulligan on the recent 'tapering' comments. But Wall Street has already 'traded out' those statements and bulls will now focus on the comments about the likelihood of an increase in rates not occurring until 2015. Keeping rates low indicates a continued bull run in equities for the foreseeable future."
"Treasury prices fell after the announcement, with the benchmark 10-year yield hitting its highest level since 2011."
Of course, it's not clear these days whether falling Treasury prices are a bullish or bearish sign.
Meanwhile the market is also concerned over the 'uncertainty' about who Obama will appoint as the next Fed Chairman.
"President Barack Obama added to uncertainty about Fed policy on Tuesday, when he gave a press interview in which he suggested that Bernanke would leave at the end of his term in January. Obama said Bernanke had "already stayed a lot longer than he wanted or he was supposed to."
But Bernanke refused to address questions about his future at the central bank."
"(Read More: Bernanke Is 'the Ultimate Lame Duck': Langone)"
"Fed Vice Chairman Janet Yellen is widely seen as the leading candidate to replace Bernanke, but there are other possibilities, including former Treasury Secretary Larry Summers. Yellen's views are viewed as similar to those of Bernanke."
I wonder if the fiscal multiplier is still zero according to Sumner if Yellen is appointed.
No comments:
Post a Comment