Fear is gripping the stock market this morning after initial jobless claims for the week ending June 18 came in at 429,000, 14,000 higher than expectations. This is the eleventh consecutive week that claims have been above 400,000, a bad sign for the labor market. Additionally, European Central Bank President Jean-Claude Trichet said earlier today that risk signals for financial stability in the euro zone are "flashing red" in response to the Greek crisis.
The FOMC meeting that concluded yesterday yielded some interesting comments from Fed Chairman Bernanke: 1) economic forecasts for 2011 and 2012 were downgraded and Bernanke said that at least part of the economic weakness was not temporary, 2) Bernanke said he could not explain the slowdown completely although part of it was attributable to Japan and oil prices,… Chairman Bernanke had very few answers for how to stimulate the housing market, and as one commentator wrote, “Chairman Bernanke seemed befuddled with the current economic situation”. One of the few certainties we can take from yesterday is that the Fed is nowhere near ready to raise their target funds rate.
I only wish these folks would ask me for my top three ideas for turning the U.S. economy around. I am sure my ideas are replicas of the thoughts many of you folks have.
For today, bond yields are falling, with the 10 year note now trading at 2.91%.
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