The Fed bought $2.1 billion as expected today to complete the monthly round of purchases. The next monthly round should be announced on Monday or Tuesday, including the amount to be purchased for the month. We will only know the average expected weekly amount. Only in the final week will we be able to deduce the actual amount for that week. The amounts are only announced after the operations are complete. The Fed has shown over the past two months that it will schedule and allocate the buys based on when it can get the most bang for the buck in stock prices. Their apparent aim is to reignite animal spirits.
I made an estimate of next month’s purchases in the weekend Wall Street Examiner Professional Edition Fed Report. The Fed’s head of open market operations, Sack, told a gathering of analysts to expect $30 billion next month. That would be more than this month’s $27 billion. However, on the other side of the ledger that will face much greater Treasury supply in October.
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