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  1. #1
    Legendry Member milos's Avatar

    Fed kept interest rates at 0.25% !!!

    The Fed left interest rates at 0.25% and maintain a program of monthly purchases amounting to $85 billion. The Federal Reserve announced that the economy is showing signs of improvement, which is faced with difficult circumstances that have prompted the monetary authorities not to start narrowing of bond buying program.

    The news surprised many investors expected the Fed to lower monthly purchase program by 10 billion dollars. The Federal Reserve announced that improve household consumption and business fixed investment, while the housing sector is strong. Rates on mortgages have risen, while the U.S. fiscal issues hamper economic growth.

    These actions should reduce the pressure on long term interest rates and to support the mortgage market. This would lead to stronger economic recovery and to help inflation, over time, become stable. The Fed said it would keep rates at current levels until the unemployment rate reaches 6.5 %. Projection of inflation may not be above 2% .

    EURUSD jumped to 1.3523 while GBPUSD rose to 1.61630. USDCHF dropped to 0.9129 while USDJPY fell to 98.105.

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    Gold price junped to $1366 an ounce while the silver was up by $23.13 an ounce. Crude oil price rose to $107.77 per barrel.


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    S & P 500 index jumped 1.23%, while the Nasdaq was up by 1.27%.


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  2. #2
    Legendry Member milos's Avatar
    Last week the Fed was decided to give up reduce monetary incentives. It is started speculation about that could stiill be made in the end of this year.

    Chairman of the Federal Reserve St. Luisa’s James Bullard said it is possible that a reduction that reduce the program. He also said that the Central bank could decide to change monetary policy at the meeting to be held on 29th and 30 October.

    President of the New York Fed’s William Dudley said that the monetary authorities want to be sure of the sustainable economic recovery before deciding to reduce stimulus program.

    President of the Federal Reserve in Dallas, Richard Fisher, said the decision to keep buying program harms the credibility of the institution.

    US stocks on Wall Street fell after the Fed officials comments. Investors are trying to determine when the US central bank to begin narrowing monthly bond buying program, which increases the stock price by reducing the cost of borrowing. The Dow Jones fell by 0.32%. The S&P500 index went down by 0.47% while the Nasdaq composite index fell 0.25%.

  3. #3
    Legendry Member milos's Avatar
    The Fed decided to leave its key policy rate at current level of 0.25 percent. It retains the bond-buying program in the amount of $ 85 billion per month.

    Buying bonds is intended to stimulate economic recovery by keeping long-term interest rates low and thus reduce the value of the dollar. Inflationary pressures are under control.

    The Fed said it would continue to monitor the data before deciding when to start reducing the amount of monthly bond-buying program and when it completely stopped.

    FED concluded that for now monetary support will be necessary to ensure price stability and optimal employment.

  4. #4
    Legendry Member milos's Avatar
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    US stock price fell as investor try to predict when the Fed will start reducing monthly purchases bonds.

    Dow Jones fell by 0.47%, S&P500 index dropped by 0.38%, while the Nasdaq composite index fell 0.28%.

    Solid economic data were released reinforced expectations that the Fed will start narrowing incentives programs in early 2014th year and not in March as previously assumed.

    The number of people who have applied for unemployment benefit in the US fell last week by 10.000 to 340.000. Analysts had expected a decline of 21.000 to 350.000.

  5. #5
    Senior Member Deanfx's Avatar
    Quote Originally Posted by milos View Post
    US stock price fell as investor try to predict when the Fed will start reducing monthly purchases bonds.

    Dow Jones fell by 0.47%, S&P500 index dropped by 0.38%, while the Nasdaq composite index fell 0.28%.

    Solid economic data were released reinforced expectations that the Fed will start narrowing incentives programs in early 2014th year and not in March as previously assumed.

    The number of people who have applied for unemployment benefit in the US fell last week by 10.000 to 340.000. Analysts had expected a decline of 21.000 to 350.000.

    There is absolutely no change in the FED market policy since last meeting and that is only an indication that the dollar devaluation will continue. It is a bit strange that the market reaction was dollar strength but I think it will be a short term retracement of the major trend for us dollar depreciation.

  6. #6
    Legendry Member milos's Avatar
    The Fed did not change its benchmark interest rate 0.25%. After the publication of these data, the U.S. dollar strengthened against other major currencies.

    It lowered the monthly bond purchase program by 10 billion dollars, or 75 to 65 billion dollars to help the spread of financial conditions in order to strengthen the economic recovery.

  7. #7
    Veteran Member hchandra's Avatar
    Fed announcement for further tapering seems initiated Mid - Long term level for bull/Long/call



    My chart show 81.5 will be challenged again, its a matter of time either it breaks 80 or 81.5 first.

  8. #8
    Legendry Member Michael Hodges's Avatar
    tapering was expected. data is still goodish, not as strong but goodish, earnings are good, outlook is low but that could change. Long term trend in U.S. equities is up.

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