The language from Tuesday’s Fed announcement was very direct for a change. "The Committee currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013." What is unusual is the fact that three members of the FOMC dissented, meaning they did not agree with the Fed’s long term language.
Stock markets soared on this news and investors continued to pile into the safe haven of U.S. Treasuries, Swiss francs and gold. This morning we see a reversal with stocks sharply lower, giving back most of Tuesday’s gains. Interest rates continue the march lower as investors seek the safety and liquidity provided by the U.S. Treasury market.
Still on the topic of Treasuries, the Treasury Department will be auctioning $24 billion of 10 year notes today, the results of which should be posted at approximatley 1:15 PM, EDT.
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