Decoding Bernanke | Forex Factory

  • Decoding Bernanke

    From project-syndicate.org

    Federal Reserve Chairman Ben Bernanke has been struggling to deliver a clear message about the future of Fed policy ever since his May 22 testimony to the US Congress. Indeed, two months later, financial-market participants remain confused about what his message means for the direction of US monetary policy and market interest rates. CommentsBernanke’s formal statements about the Fed’s two unconventional policies have been clear. First, the Fed is trying to give relatively specific guidance about the future path of the federal funds rate (the overnight rate at which commercial banks lend to each other). Second, ... (full story)

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Ill-b-back
Jul 29, 2013 8:14pm
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I can't help but think without the planted journo asking the question on tapering timeline, we would have all just been able to quietly get on with our lives without being bombarded with tapering projections.

But then there would not have been so many headlines/clicks/confusion.

So I understand...
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agd108
Jul 29, 2013 9:57am
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I think this article hits it spot on. The QE cannot continue indefinitely and I think Bernanke's timeline makes sense. In his clarifications he has never postponed it, just reassured that July is too early. I think September is still likely. They will also try to avoid too much of a speculative bubble in equities and commodities with too much QE.
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Chi
Jul 29, 2013 12:21pm
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Regardless how well the housing recovered, it is the fact that the job market has been improving slowly and trying to meet its benchmark at 6.5% over the past several months.

Through the recent ups and downs in the job market which would be the KEY factory towards future monetary policy, it is feared that the current monetary policy might NOT working at its best meeting its benchmark; However, Housing and consumer confident showed significant gain in the past months and showed sign of great recovery since 2008 recession.

I believe, until BOTH Housing and Job show clear direction WITHOUT ANY CONFLICT, Dollar would stay consolidated, and Bernanke's statement would stay uncleared.

New round of FOMC statement and Unemployment Rate will be out this week, and we will see what happens.
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Spreadbetter
Jul 29, 2013 12:32pm
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The 'real' level of USA unemployment is measured by U6, and its currently at 14.3%.

Quoting Chi
Regardless how well the housing recovered, it is the fact that the job market has been improving slowly and trying to meet its benchmark at 6.5% over the past several months.

Through the recent ups and downs in the job market which would be the KEY factory towards future monetary policy, it is feared that the current monetary policy might NOT working at its best meeting its benchmark; However, Housing and consumer confident showed significant gain in the past months and showed sign of great recovery since 2008 recession.

I believe, until...
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Chi
Jul 29, 2013 12:52pm
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Quoting Spreadbetter
The 'real' level of USA unemployment is measured by U6, and its currently at 14.3%.

Spreadbetter, I am sorry I do not see where are we going with this number.

Are you saying that we are still a far way out or the number currently presented on the board is incorrect?

But either way, it can only be used as reference, and i am not saying its useless, but when it comes to make the decision of putting down the order, right now the REAL and OFFICIAL unemployment rate is 7.6%.

Yeah?
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Spreadbetter
Jul 29, 2013 2:24pm
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The real number masks many of the real life economic issues percolating in the background that will prevent the Fed reaching the fantasy number of 6.5% unemployment. Iirc an extra two million jobs would need to be created to reach that level, in effect taking the usa back to pre Great Recession employment levels. Creating two million jobs (net) would require perhaps two more years of uninterrupted growth or 85bn x /4 months of monetary stimulus. It's not simply when (if) tapering occurs but how the Fed deals with the engorged balance sheet.

Quoting Chi
Spreadbetter, I am sorry I do not see where are we going with this number.

Are you saying that we are still a far way out or the number currently presented on the board is incorrect?

But either way, it can only be used as reference, and i am not saying its useless, but when it comes to make the decision of putting down the order, right now the REAL and OFFICIAL unemployment rate is 7.6%.

Yeah?
Reply
Chi
Jul 29, 2013 6:16pm
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Quoting Spreadbetter
The real number masks many of the real life economic issues percolating in the background that will prevent the Fed reaching the fantasy number of 6.5% unemployment. Iirc an extra two million jobs would need to be created to reach that level, in effect taking the usa back to pre Great Recession employment levels. Creating two million jobs (net) would require perhaps two more years of uninterrupted growth or 85bn x /4 months of monetary stimulus. It's not simply when (if) tapering occurs but how the Fed deals with the engorged balance sheet.
Yeah every related items comes into play while each of them holds an unknown factor.

I try not to have them cloud my judgement while only judge and decision on the results that is the presented to us in due time.




now,

If anyone could come up a working analysis to, why it is till up to Bernanke to make the call? and if Bernanke is uncleared about his statement, I'd wait till he makes up his mind. =)

Interesting analysis you have there, Spreadbetter. I am not saying its right or wrong. but I simply respect the fact you were able to connect the dots to share with us.

Thanks.
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ahsan farooq
Jul 29, 2013 8:50am
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why this news make doller weak??? :O
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ali awan
Jul 29, 2013 9:27am
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make dollar strong today but real impact on Wednesday
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