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QE Update: down to $25bil this month, still ending in October
Posted on 7/30/14 at 3:19 pm
Posted on 7/30/14 at 3:19 pm
Just so the politards are current. 
LINK
quote:
Fed policymakers, as anticipated, agreed to reduce purchases of Treasury bonds and mortgage-backed securities to $25 billion a month from $35 billion. The Fed has said it expects to end the program in October.
quote:
The statement conceded that inflation "has moved somewhat closer" to the Fed's 2% annual target. But it added that long-term inflation expectations remain stable.
quote:
Since the program began, the unemployment rate has fallen to 6.1% from 8.1% and average monthly job growth this year has accelerated to a 200,000-plus pace. The Fed, pointing to the gains, has tapered down the bond purchases from $85 billion a month since December.
LINK
6
Posted on 7/30/14 at 3:27 pm to 90proofprofessional
Cant wait for this Mexican donkey show to end.
My body is ready!
My body is ready!
Posted on 7/30/14 at 3:28 pm to 90proofprofessional
quote:
The Fed, pointing to the gains, has tapered down the bond purchases from $85 billion a month since December.
I predict this thread will get 4 maybe 5 post. This is actually the most telling number regarding the economy, which is getting stronger.
This is odd:
quote:
reduce purchases of Treasury bonds and mortgage-backed securities to $25 billion a month from $35 billion.
I'll pass on the Mortgage backed securities.
Posted on 7/30/14 at 3:32 pm to 90proofprofessional
quote:
QE Update: down to $25bil this month, still ending in October
Going to be interesting to see what happens in Q4 as this expires. I suspect we will see a tapering of growth.
but another poster said this is the best signal the economy is improving. Yellen is a big believer in QE, she won't let this end if she doesn't feel confident that the economy is better.
Posted on 7/30/14 at 3:33 pm to Lakeboy7
I''m honestly open minded on this. How long do these types of actions typically take to trickle down to market level activity? a few months? immediate?
Posted on 7/30/14 at 3:35 pm to TigerFanatic99
quote:
I''m honestly open minded on this. How long do these types of actions typically take to trickle down to market level activity? a few months? immediate?
Its almost immediate.
Posted on 7/30/14 at 3:40 pm to Hawkeye95
quote:
I suspect we will see a tapering of growth.
Hopefully just some leveling.
Posted on 7/30/14 at 3:40 pm to Hawkeye95
I feel like we're ignoring interest rates...
Posted on 7/30/14 at 3:40 pm to TigerFanatic99
quote:
How long do these types of actions typically take to trickle down to market level activity?
Not sure what you mean. Inflation? Employment? Financial asset prices?
Posted on 7/30/14 at 3:42 pm to 90proofprofessional
The effects of QE have had what they've referred to as a "diminshing return" on the market...original declarations had huge effects and each statement after had less and less of an effect, including declarations of tapering...
Posted on 7/30/14 at 3:42 pm to BaylorTiger
quote:
I feel like we're ignoring interest rates...
You disagree with the mid-2015 projection for them going up? They acknowledge some disagreement there, some think it'll need to happen earlier
Posted on 7/30/14 at 3:43 pm to BaylorTiger
quote:
effects of QE have had what they've referred to as a "diminshing return" on the market
You mean on the stock market? Was that their actual target?
Posted on 7/30/14 at 3:47 pm to 90proofprofessional
quote:
The statement conceded that inflation "has moved somewhat closer" to the Fed's 2% annual target. But it added that long-term inflation expectations remain stable.
Such bullshite. Why do they think the average american family's net worth is down so much? It's cause they've devalued the dollar with all this QE crap, amongst all the other wasteful ways washington blows through money.
Posted on 7/30/14 at 3:49 pm to 90proofprofessional
quote:
Was that their actual target?
no. there goal was to encourage banks to lend by driving interest rates down, so that were more attractive than sitting on the cash.
I have no idea if it worked or not.
the side effect was a booming stock market, which I am sure everyone liked.
Posted on 7/30/14 at 3:52 pm to 90proofprofessional
Interest rates below nominal GDP growth help to accelerate economic activity and vice versa. So if interest rates were lower than GDP I'd agree with a Mid-2015 projection.
Currently the higher interest rates are retarding econoimc growth, suggesting the next move in interest rates is lower until GDP can catch up.
I guess what I'm saying, and let's be honest the FED has been setting and missing tappering deadlines and interest rate goals since...forever, is that the Economy is going to improve but much slower than that.
When the FED quits buying bonds the bond market will need to increase rates to attract buyers...which will be a two fold effect...it will move investors out of the market and it will put a futher hamper on GDP.
I feel like we're back in the "green shoot" stage where we're seeing the light but it's going to be slow...or bubbled and temporary.
Currently the higher interest rates are retarding econoimc growth, suggesting the next move in interest rates is lower until GDP can catch up.
I guess what I'm saying, and let's be honest the FED has been setting and missing tappering deadlines and interest rate goals since...forever, is that the Economy is going to improve but much slower than that.
When the FED quits buying bonds the bond market will need to increase rates to attract buyers...which will be a two fold effect...it will move investors out of the market and it will put a futher hamper on GDP.
I feel like we're back in the "green shoot" stage where we're seeing the light but it's going to be slow...or bubbled and temporary.
This post was edited on 7/30/14 at 3:55 pm
Posted on 7/30/14 at 3:55 pm to BaylorTiger
quote:
So if interest rates were lower than GDP I'd agree with a Mid-2015 projection. [snip]When the FED quits buying bonds the bond market will need to increase rates to attract buyers...which will be a two fold effect...it will move investors out of the market and it will put a further hamper on GDP.
So you disagree strongly with their GDP projections.
Posted on 7/30/14 at 3:57 pm to 90proofprofessional
Yes.
What's your opinion/why?
What's your opinion/why?
Posted on 7/30/14 at 3:58 pm to Hawkeye95
Banks have been tight as shite on lending money for the past 2 years.
Posted on 7/30/14 at 4:06 pm to Hawkeye95
quote:
Going to be interesting to see what happens in Q4 as this expires. I suspect we will see a tapering of growth.
Interest rates will likely rise especially if we continue to print 4% GDP numbers.
Lock your mortgage in.
Posted on 7/30/14 at 4:08 pm to GumboPot
quote:
Interest rates will likely rise especially if we continue to print 4% GDP numbers.
We won't. Interest rates are down on the year.
This post was edited on 7/30/14 at 4:09 pm
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