Having now surpassed 300 points on the Dow today, it appears that the stock markets like what they heard from the FOMC statement this afternoon, since the stock market indexes are higher, and treasuries have begun to sell off. While 80% of the rise occurred prior to the statement, it appears to have been mostly in anticipation of that statement or as a reaction to further weakness in the price of crude oil (or perhaps the combination of both). It appears that the statement by the Central Bank is perceived as modestly more hawkish toward inflation, but without any sign of an imminent tightening of interest rates in the mid-term future. The Fed Fund futures are higher for the December 08 FOMC meeting.Tuesday, August 5, 2008
Verdict on the Fed Is In -- Stocks LIKE It!
Having now surpassed 300 points on the Dow today, it appears that the stock markets like what they heard from the FOMC statement this afternoon, since the stock market indexes are higher, and treasuries have begun to sell off. While 80% of the rise occurred prior to the statement, it appears to have been mostly in anticipation of that statement or as a reaction to further weakness in the price of crude oil (or perhaps the combination of both). It appears that the statement by the Central Bank is perceived as modestly more hawkish toward inflation, but without any sign of an imminent tightening of interest rates in the mid-term future. The Fed Fund futures are higher for the December 08 FOMC meeting.
