FOMC leaves federal funds rate unchanged this afternoon. Here’s a copy of their statement. I’m not in a good mood so don’t expect anything until I cool off. Sorry.
Wednesday, June 25, 2008
Monday, June 23, 2008
The Week Ahead…
This week should promise to be full of excitement as the FOMC meets Tuesday and Wednesday to decide the fate of the U.S. economy. Well perhaps not the fate, but they will decide on new interest rate policy. At this point, any further rate cuts will probably signal financial suicide, so expect the FOMC not to cut rates. However, some analysts in the financial world are figuring a rate increase from the Fed this week in order to battle inflation and to make an attempt in strengthening the dollar against the rest of the world. Futures this week are showing rates will remain stable at 2.00%. A rate increase at this point would be more symbolic than helpful as it would signal that the inflationary pressures the U.S. has been experiencing are indeed real and a priority. As most of you know, it’s gotten a bit expensive to eat and drive into work. Expect a stronger inflationary statement from the FOMC this week.
On Tuesday, we have consumer confidence at 10:00 am EST. Wednesday brings Durable Goods (8:30 EST), New Home Sales (10:00 EST), and the FOMC announcement (02:15 EST). Thursday’s a fairly important economic day with last quarter’s GDP and Jobless Claims (08:30 am EST), as well as Existing Home Sales (10:00 am EST). And rounding out the week on Friday is Consumer Sentiment at 10:00 am EST. Details can be found here.
Futures were up over 50 points last night but are currently up about 10 points. I’m looking for some sort of a dead cat bounce, but at this rate, I don’t know if it’ll happen. We’ll see!
Wednesday, April 30, 2008
April 30, 2008 – FOMC Cuts Federal Funds Rate 25 Basis Points to 2.00%
The FOMC this afternoon cut the Federal Funds Rate and the Discount Rate by 25 basis points to 2.00% The following is the text of the FOMC announcement.
FOMC Meeting; Announcement in 60 Minutes
The FOMC met yesterday and this morning regarding the state of the economy. The markets are currently pricing in an 80% chance of a 25 basis point cut. So far, the markets are up about 100 points prior to the announcement in approximately 60 minutes. Personally, I hope the Fed decides to hold firm and leave that bullet in its chamber. The markets need time to work through the 300 basis points the FOMC has cut over the past 6-7 months. It takes the economy approximately 6 months to feel the full effects of a rate cut (at least, that’s what I remember from basic macroeconomics). With GDP holding steady at +0.6%, I think the fears of recession are on their way out the door. Stay tuned for the announcement!
Monday, October 29, 2007
FOMC Meeting Tuesday and Wednesday
The Federal Open Market Committe (FOMC) “The Fed” will meet tomorrow and Wednesday. What does this mean for you? Well word around The Street says a 25 basis point cut for the federal funds rate is coming. Short term, stocks should shoot somewhat upward, especially after the rough couple of weeks we’ve had. If you deal with currencies and commodities, specifically oil, expect the value of the dollar to drop and the price of oil to gain some strength, at least from my observations from the last rate cut. With the financial sector potentially rallying from the cut, I’ve gone ahead and opened a few calls on the financial sector ETF, the XLF, or Financial Select Sector. I’m just learning about ETFs and how to hedge and gain traction on the overall market so in the coming weeks I’ll go ahead and write up some guidelines on ETFs that options traders tend to focus on.