Tuesday, June 19, 2012

FOMC policy announcement tomorrow (I bet on a surprise)


The Federal Reserve's monetary policy making committee will be releasing information from their every-six-week policy meeting tomorrow (you can see their Press Release by clicking on the "Statement" link for June meeting tomorrow after 12:30. Despite the disappointed expectations from Bernanke's testimony at his address to the Joint Economic Committee (see the entire hearing), I have a feeling that the Fed is going to announce a formal easing program tomorrow. Certainly the Fed has not at all taken a QE3 (in reality a QE5 or QE6) off the table, but I don't think markets have signaled recently that they expect a new purchase program from the Fed. I could be off base, but I have a feeling that the Fed thinks a surprise announcement toward more money printing might jump start the economy. Of course, all it will do is jump start financial markets holding dollar denominated assets.     Update: If Bernanke does announce a new round or easing or if he drops a strong hint that they might do it soon, we will see markets rally. Gold and silver could hit new records in the next few months. We will see.

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