Are Fed actions as uncertain as the securities markets?
*Barron's, by Jacqueline Doherty, August 27, 2011:
''Federal Reserve Chairman Ben Bernanke told the markets exactly
what they wanted to hear at the Jackson Hole, Wyo., conference on
Friday: The economy is still growing, the Fed has plenty of ways to
save the economy if it stops growing, and inflation should settle down
now that oil prices have retreated.
The stock market believed him. But the bond and gold markets
weren't quite convinced. The Dow Jones Industrial Average rose
134 points Friday, capping a winning week. But Treasury yields
fell slightly, and gold rebounded somewhat from a sharp selloff earlier
in the week.
Stock investors may be overestimating just how much latitude Bernanke
had to announce new measures to boost the economy. At the Federal
Open Market Committee meeting earlier this month, three of 10 voting
members lined up against the FOMC's decision to indicate it would keep
interest rates low through mid-2013. The dissenters preferred not
to put a date on the duration of the low-rate environment.
Given the unusual opposition, it's not surprising that Bernanke didn't
imply that any new, grand changes to monetary policy were on the way.
Instead, he announced that September's meeting would be expanded to a
two-day affair.''
*This information is solely a highlight of the opinion of a third-party publication and is incomplete. Please subscribe to this publication for the full and timely opinion of the author and call a Monex Account Representative for any additional up-to-date information. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.
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