Fedspeak: More Bond Buying ($100B a Month?) Ahead
A string of U.S. Federal Reserve officials on Tuesday indicated the central bank will soon offer further monetary stimulus to the economy, with one saying $100 billion a month in bond buys may be appropriate.
While some internal reticence to the unconventional policy was still evident, the consensus view at the Fed sees the economy as weak enough to warrant further support, most likely through increased purchases of Treasury debt.
The U.S. economy is expected to have grown just 1.9 percent in the third quarter, a level considered too low to bring down unemployment.
The debt purchases would help lower long-term interest rates in the hope of boosting demand.
Atlanta Fed President Dennis Lockhart's willingness to cite a specific dollar figure for purchases, one largely in tandem with market expectations, was seen as another hint that planning is actively underway.
"If we're going to pursue another round of quantitative easing, it has to be a large enough number to make a difference," Lockhart said in an interview on CNBC.
FX Market Update 19th October 2010
Today we have seen some respite for the USD. The Dollar has made gains against most currencies today as US Treasury Secretary, Timothy Geithner has said that the US will work to preserve confidence in a strong currency and will not work to devalue their currency.I can't think of two more conflicting directions. More quatitative easing at the level needed to move the economy should ultimately crash the dollar. Yet, we're supposed to defend the dollar at the same time?
Many economists have recently been writing about the global currency war taking place at the moment. It seems that the US is trying to make out that it is not their intention to join this race to devalue their currency. As a result of Geithners’ comments the USD is now testing support at 1.57 on cable. The long term outlook is still for USD weakness and this move could represent an excellent opportunity for a long position on the dollar. Gold prices have dropped 2% off their highs on this USD strength.
Oy Vey, would the real idiot sit down and shut up, so we can here what's really going to happen.
My money is on Big Ben and more easing because that's all the bobble heads know, and little Timmy can sit in the back as number 2 and back seat drive all he wants, but no one's listening. Are we there yet?
And where's Moe to clunk their heads together when we need it?
It seems highly likely Tweedledum is just playing politics and talking the market and saying what many want to here. I still think that's little Timmy G. Everyone wants to here strong dollar language, but push come to shove especially with any push up in unemployment and Big Ben is going with QE2!
Hope all is well.
J.D. Rosendahl, Rosey