Looks like TWIST and not QE.
So, the Fed is doing something to address what they see as an economy growing "less quickly that it normally would" without exhausting all their tools. The Fed’s now forecasts an unemployment rate between 8% and 8.2% this year — basically, no improvement from June’s level of 8.2%.
So, the Fed is doing something to address what they see as an economy growing "less quickly that it normally would" without exhausting all their tools. The Fed’s now forecasts an unemployment rate between 8% and 8.2% this year — basically, no improvement from June’s level of 8.2%.
The Fed indicated that the housing market remains depressed and noted that global financial strains are also weighing on economic growth...not the most novel of observations.
- Here are the Fed's projections.
- Here is Goldman's take brought to you by ZeroHedge.
What does this mean for the Fed's balance sheet (something the media generally ignores and focuses on the rhetoric)? After three months of contraction (from expiration), we should once again see sudden growth from the new TWIST. This action will keep the balance sheet at the $2.9-$3 trillion level for the next year. That is a large sheet my any measure.
While the economic news is not good, this provides value investors additional time to hunt for deals (that is me!). Expect stock market volumes to remain low. The largest worry for me is still corporate revenues. How will continued global economic slowing effect my models? More later.
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