The Fed: Will they or won’t they?

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The Fed: Will they or won’t they?

My guess is that they won’t. Drop the phrase” for an extended period” from their description of how long rates will stay abnormally low, that is. We’re getting close to tat point in time, but I’m guessing they’d like to see a bit more data before they signal that they plan to shift policy in the months ahead. If they maintain the same dovish verbiage as the September statement, expect asset markets to rally strongly and the dollar to slump, at least in the near-term. A move to drop the “extended period” description is seen by many as a signal that a hike will come in the next three-to-six months. The buck would rally on that outcome and risk trades would slump as the days of nearly-free... Full Story

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redbarron

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Submitted Nov 3, 2009 3:27pm

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