The Fed will decide on Wednesday whether, and by how much, it will increase the rate at which it pumps cash through Primary Dealer trading accounts. What it decides will have an impact on how fast stocks are likely to advance, and how soon that advance will end.
A new program of QE that adds to the Fed’s balance sheet will probably cause commodities to catch fire again, which would short circuit any perceived benefits of renewed QE to the markets and the economy. A more modest buying program, consistent with holding the balance sheet level by replacing MBS being paid off and maturing GSE paper, would probably result in some short term selling, but should not disturb the trends in place. That could include a reversal in Treasuries (see Treasury update). Meanwhile stocks would probably resume their rally after some instability.
Click here to download complete report in pdf format (Professional Edition Subscribers) including 109 pages of charts and clear, cutting edge analysis that you can use to gain an edge in the market. Try the Professional Edition risk free for thirty days. If, within that time, you don’t find the information useful, I will give you a full refund. It’s that simple. 30 day risk free trial for new subscribers. Click here for more information.
By clicking this button, I agree to the Wall Street Examiner’s Terms of Use.
Promo Stay up to date with the machinations of the Fed, Treasury, Primary Dealers and foreign central banks in the US market, along with regular updates of the US housing market, in the Fed Report in the Professional Edition, Money Liquidity, and Real Estate Package. Try it risk free for 30 days. Don’t miss another day. Get the research and analysis you need to understand these critical forces. Be prepared. Stay ahead of the herd. Click this link and begin your risk free trial NOW!
Enter your email address in the form to receive email notification when Professional Edition reports are posted.
Join the conversation and have a little fun at Capitalstool.com. If you are a new visitor to the Stool, please register and join in! To post your observations and charts, and snide, but good-natured, comments, click here to register. Be sure to respond to the confirmation email which is sent instantly. If not in your inbox, check your spam filter.
You must log in to post a comment.