The Fed is likely to keep the full $85B QE program in place when it meets next week, writes Jon...

The Fed is likely to keep the full $85B QE program in place when it meets next week, writes Jon Hilsenrath, but on the table should be whether to refine its forward guidance, particularly whether to lower the 6.5% UE rate threshold for tightening policy. At issue is the Fed's desire to calm market worries over an imminent hike in interest rates. In the running for Fed chief, Larry Summers suggests the UE threshold might be too high.

Comments (10)
  • wyostocks
    , contributor
    Comments (9105) | Send Message
    Obama says he wants to help the middle class and Ben continues to screw the same middle class. Ergo, the rich get richer.
    25 Jul 2013, 03:25 PM Reply Like
  • into dark shadows
    , contributor
    Comments (453) | Send Message
    Calm the market?
    You have got to be kidding!
    How about calm the death of the American working man / woman's standard of living!
    This is disgusting, just how much more do we have to have our dollar destroyed so Wall Street / Hedge funds can make another billion here or there!
    Bernanke has been so impotent in trying to stabalizse the economy, we can only hope the country holds together despite him and the progressive onslaught from D.C.


    God save the Republic
    25 Jul 2013, 03:51 PM Reply Like
  • steve4466
    , contributor
    Comments (119) | Send Message
    As September approaches and the Fed increasingly realise that their plan to start tapering is not feasible, they will lower the UE rate threshold just to save face and avoid admitting they were wrong. Let's remember that originally the UE rate for the Fed to start reducing QE was generally regarded as 7.5% (actually they said "below current levels" - which were 8% at the time). They've been caught in a game of lowering their UE threshold ever since, as each time it's about to get hit the market calls their bluff.
    25 Jul 2013, 04:06 PM Reply Like
  • Marco Mazzocco, CFA
    , contributor
    Comments (187) | Send Message
    The data has improved since the last meeting, so why does tapering get pushed back ?
    25 Jul 2013, 04:11 PM Reply Like
  • akmmm199
    , contributor
    Comments (42) | Send Message
    TTM- 1year Performance
    Dow = 22.4 %
    Spyders = 26.1 %
    Small IWM=36.1 %


    Fed wants to "calm the markets so they don't keep crashing down like they have been last 1 year" . They need to make the markets reverse course and go up hence QE will continue.
    25 Jul 2013, 04:23 PM Reply Like
  • Whitehawk
    , contributor
    Comments (3121) | Send Message
    The crash will be all that much more spectacular.
    25 Jul 2013, 04:55 PM Reply Like
  • SmashFinance
    , contributor
    Comments (34) | Send Message
    I think the FED is eyeing the yield on the 10yr more than anything else... over 2.5% has got to worry them a bit. Maybe they scare the market a bit with some "Taper Talk" to push money back into USTs
    25 Jul 2013, 06:08 PM Reply Like
  • Lakeaffect
    , contributor
    Comments (1332) | Send Message
    you meant to say "not taper talk"?
    25 Jul 2013, 06:36 PM Reply Like
  • The Geoffster
    , contributor
    Comments (4276) | Send Message
    The real issue for the Fed is whether MMT can save the day. If not, we are witnessing the death throes of the dollar. The new currency regime will follow on the heals of cheap natural gas fueling a large percentage of our energy needs. Let the markets decide.
    25 Jul 2013, 07:45 PM Reply Like
  • Marco Mazzocco, CFA
    , contributor
    Comments (187) | Send Message
    I really don't see why there is any confusion. Bernanke has said quite clearly that everything is data dependent. Good news, sell bonds...bad news, buy bonds....Personally, I think its a great environment to keep a core short bonds position and just keep trading around it. TMV has been working well so far. As for Hilsenrath...I think he and Bill Gross should hang out together and see who can be more wrong.
    25 Jul 2013, 09:40 PM Reply Like
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