…out, that is for Ben Bernanke, who in a few minutes will waltz up to the microphones and undoubtedly try to walk a soft middle between reining in runaway government money printing (in the back room via quantitative easing) while at the same time, putting enough of a scare in the market that higher rates are still likely coming…just not yet….to keep runaway inflation from setting in.
To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the asset purchase program ends and the economic recovery strengthens. The Committee also reaffirmed its expectation that the current exceptionally low target range for the federal funds rate of 0 to 1/4 percent will be appropriate at least as long as the unemployment rate remains above 6-1/2 percent, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee’s 2 percent longer-run goal, and longer-term inflation expectations continue to be well anchored. In determining how long to maintain a highly accommodative stance of monetary policy, the Committee will also consider other information, including additional measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments. The Committee now anticipates, based on its assessment of these factors, that it likely will be appropriate to maintain the current target range for the federal funds rate well past the time that the unemployment rate declines below 6-1/2 percent, especially if projected inflation continues to run below the Committee’s 2 percent longer-run goal. When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent.
Since this is Bernanke’s last big hurrah, I don’t expect anything too remarkable out of the press conference, but we shall see. Not holding breath, of course. This is a fine exit stage right time.
The Fed Statement is available over here at the Federal Reserve website.
A couple of markets were giving us a pretty clear read on what was to come:
For a moment, gold had popped almost $9 bucks to the upside, and the NASDAQ Composite had dropped a good bit going into the announcement..
Normally, what happens is there is an initial spurt to the direction the market will head, then a pullback to give the commercials a chance to load up, and then they will make money selling to the six or seven members of the small investing public left who have two nickels to rub together to buy stocks.
Another key indicator? UrbanSurvival readership is counter-cyclical. I’m a general bear on the economic charade, and when people begin to suspect I’m right (and things are about to get worse) the readership skyrockets.
Over the past couple of days, the readership numbers have been lower than they should be for this time of the year, which means what? Simply that the smart money (and Peoplenomics readers) were braced for the Big Easy going into this announcement.
Surprised? sUREly you jest.