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’FOMC statement – 9 August 2011
It’s here! We’re saved!
Wait a minute….
The full FOMC statement for August 9 is pasted below for your reading pleasure.
It’s more QE2.0 than QE3.
There are two key changes.
First, the Fed has given a semi-specific date for the continuation of the federal funds rate at “exceptionally low levels”.
Risk on… wait, never mind
Remember when risk assets bounced on Bernanke’s testimony suggesting that QE3 was now under more serious consideration within the FOMC?
That was at 10am EST on Wednesday, but then the rally lost its legs.
Search for the proverbial one-armed economist continues
On the one hand…
…the possibility remains that the recent economic weakness may prove more persistent than expected and that deflationary risks might reemerge, implying a need for additional policy support.
Bernanke has other ways of acting
All this debate about whether or not we will see another round of quantitative easing in the US, and yet, in his latest comments, Ben Bernanke has hinted more strongly than ever that if the Fed does act it might do so in a very different manner.
Koo and Gross on what Bernanke will do next
Apologies for the public school levels of surname chicanery in the title but a couple of big hitters have weighed in before the Fed Chairman’s special appearance on US Markets Live on Wednesday.
Richard Koo, chief economist at Nomura Research Institute and analyst-in-chief of “balance sheet recessions”,
FOMC preview: countdown to more of the same, probably
We plan to pummel you with unrelenting promotion remind you once or twice more before Wednesday, but we’ll be hosting a Markets Live session during Bernanke’s press conference after the FOMC meeting.
Despite the many obvious signs of slowing growth since the FOMC last met in April,
Pitiful profits prospects
What will happen to US corporate profits once the economy is forced to let go of the government’s helping hand?
That’s the subject of a new note from Credit Suisse, and the answer is predictably discouraging.
Bernanke: I’ll now take questions from the floor…
“… Yes, you, the short man in the smart suit.”
“Jamie Dimon, JP Morgan. I’d just like to ask…”
“Wait, I meant Hilsenrath.”
Bernanke: “The US Economic Outlook”
Ladies and gentlemen, the hunt for QE3 clues from Big Ben himself begins NOW, with his speech Tuesday to the International Monetary Conference.
Here’s the relevant section, coming at the end:
Monetary Policy
Let me conclude with a few words about the current stance of monetary policy.
FOMC minutes from the April 27 meeting
These are the minutes from the meeting that preceded the big press conference.
While there’s been a well-publicised internal debate at the Fed about the timing of future policy tightening, it seems from these minutes that the discussion over how to tighten is less divisive.
The dollar-battering Bernanke presser
To quote (again) a pint-sized musical firecracker from Minneapolis, this is what it sounds like when doves cry:
At pixel time the US dollar index was at its lowest point in nearly three years against a basket of currencies.
Markets Live – Fed press conference special, featuring Gavyn Davies
Not since Arthur Dent quizzed Deep Thought has a Q&A session been so eagerly anticipated.
On Wednesday (27 April) at 2:15pm New York time / 7:15pm London time Federal Reserve Chairman Ben Bernanke will conduct the first post-FOMC press conference in the central bank’s history.
What to expect from Chairman Bernanke
No doubt about the big financial event of the week — it’s Ben Bernanke’s first post-FOMC meeting press conference.
And like the other big event of the week — the Royal Wedding in London, England — courtiers are doing some careful stage planning to make sure everything goes smoothly.
Tightening: not when, but how fast
In a previous post we looked at how the futures markets were pricing in the eventual beginning of Fed tightening.
Yeah, we know — it’s way too premature to be discussing this.
But stick around, because recently we came across an interesting paper by RBS that says the when matters a lot less than the how of tightening — referring specifically to the speed.
Don’t wait for Fed rate hikes — Morgan Stanley
FOMC minutes are out Tuesday afternoon and we’ll be at the ready for signals of an exit strategy for the Fed.
In a short note out in advance of their release, Morgan Stanley adds its name to those warning a “tightening moment”
An exit strategy for the Fed
We have all the tools we need to achieve a smooth and effective exit at the appropriate time.
Ben Bernanke, Semiannual Monetary Policy Report to the Congress, March 1, 2011
Friday’s decent jobs report and accompanying hawkish cacophony have encouraged further talk about when the Fed will raise rates and revert to a place called normalcy.
Price-level targeting: no chance
Former CEA chair Cristina Romer talks to Ezra Klein:
Ezra Klein: You’ve also criticized the Federal Reserve for not doing more. What would you like to see them doing?
Cristina Romer: I’m teaching a course this semester on macro policy from the Depression to today.
Being Ben Bernanke
April 27.
Mark the date in your diary.
It’s the Federal Reserve’s first quarterly news conference — Ben Bernanke’s chance to answer his critics and speak up for his policies (and opportunity for the fourth estate to indulge in a spot of Fed bashing).
Further further reading
For the commute home, where your wealth funds are always sovereign,
- A quick who’s who in Yemen.
- Bernanke to start doing quarterly press conferences.
- Surprise! SWFs help prop up autocrats.
The Fed and its MBS portfolio
Interesting note, this.
It’s from the banks team at RBS and it looks at the reaction to Monday’s news that the US Treasury plans to sell $142bn of Mortgage-Backed Securities (MBS) purchased during the crisis as part of its Fannie Mae and Freddie Mac bailout.
El-Erian vs Bernanke – FT Tilt
Ben Bernanke took his moveable feast of easy money to Paris on Friday — but Mohamed El-Erian is not pleased with what the Fed Chairman had to say.
You can find out why over on FT Tilt — for free and without registration (but you know,
Prepare for a major market over-reaction
Albert Edwards is back – back, that is, from his annual search for January sun to counter the effects of Seasonal Affective Disorder (SAD).
And the sojourn looks to have been partly successful. Obviously the Soc Gen strategist remains bearish — he reckons the long-term downtrend in 10-year bond yields is under serious threat.
Gaelic TALF, and other bizarre Irish bank fixes
Amazing stuff on Friday from Fine Gael, the party that’s likely to take power in Ireland’s elections later this month, on their policies for fixing Ireland’s bailed-out banks.
Previously, Fine Gael have blown hot and cold on whether to burn Irish banks’ senior bondholders (the subordinated debt is already toast).
Bernanke to journalists: you’re awesome, now here’s an update
He began his speech to the National Press Club by buttering up the journalists in the crowd — “Your job is not easy, but it is essential” (thanks) — before moving on to more substantive matters.
First an update on the employment situation ahead of Friday’s big nonfarm payrolls report:
Ill(inois) behaviour in the municipal markets [updated]
Sing along with us:
From a wilderness of prairies, Illinois, Illinois,
Straight thy way and never varies, Illinois, Illinois,
Till upon the inland sea,
Stands thy great commerical tree, turning all the world to thee,
Bernanke bashes the budget
The man with 100 per cent confidence in himself doesn’t seem to have the same belief in Congress.
Ben Bernanke was giving testimony and answering questions in front of the Senate Budget Committee at pixel time on Friday.
The Fed in 2011
We noted a few weeks ago that the futures market was probably getting ahead of itself in predicting that the Fed would begin tightening policy sometime after August of this year.
This passage from the minutes of the last FOMC meeting…
Dear Santa… This is Ben
Found by the creative writers at JPMorgan Asset Management — a letter to Santa, from a boy (one ‘Ben’) who lives in the Washington DC area of the United States:
“Dear Santa,
It’s that time of year once again and I would like to ask you for some very special presents for Christmas this year.
‘A new era of Treasury price volatility’
Last week’s US Treasury sell-off; deficit despair or recovery-related optimism?
What about a not-so-secret stimulus encouraged by Fed chairman Ben Bernanke?
Former Lehman Brothers trader and now prolific Twitterer,