Friday’s weaker than expected JOBS REPORT caused AGITA in the BOND and EQUITY MARKETS. Early in the week, the markets had punished the BONDS and EQUITIES as the FOMC MINUTES caused the purveyors of QE3 as a SURE THING to stop, look and listen. The sounds that they had listened to were from the previous speech by Chairman Bernanke as he voiced his deep concerns about the persistent drag of unemployment on GDP. The rush of FED governors and District presidents to any microphone to undermine the chairman’s views caused the market to pause and reconsider its stance on possible FED normalizing rates quicker than the “extended period” language presumed. Stocks were under pressure and U.S. Treasuries were offered as hints of FED buying grabbed traders attention.
Posts Tagged ‘equity market’
Notes From Underground: All My Words Come Back to Me in Shades of Mediocrity (Homeward Bound)
April 9, 2012Notes From Underground: Bernanke’s Suatainable Trajectory
June 8, 2011The FED chairman delivers a major address on the economy at the International Monetary Conference hosted by the Atlanta Fed. It seems that the FED is content to stand behind the veil of its dual mandate. Bernanke did a great deal to explain away the transitory nature of commodity price increases, while maintaining that the economy recovery is too fragile and unemployment too lackluster to begin removing the language of … “economic conditions are likely to warrant exceptionally low levels for the federal funds rate for an extended period.” This is very consistent language and unlike the way the S&Ps reacted to the chairman’s speech, I believe that Bernanke’s language was very soft.