Daily Market Blog: Goodbye Elizabeth, your ship has come in
"They will do whatever it is that they need to do to stick to their mandate, worrying about it or stressing about it is a waste of effort. Effort that could be spent analysing companies, the decisions that really matter for investors. Rates go up and down, it seems Mr. Market is looking for the unknown on the timing of the first rate hike"
To market, to market to buy a fat pig. The ship has finally sailed. The end of one of the biggest experiments in monetary policy ever. This current bond buying program (Mortgage Backed Securities and Treasury Securities), referred to as QE3, Quantitative Easing (third time), had the curtain come down. Check it out, the second part: Statement Regarding Purchases of Treasury Securities and Agency Mortgage-Backed Securities. The program ends Friday, Halloween. For some, the size and scale of the Fed program was scarier than Freddy Krueger, Jason, Dracula, Frankenstein, for me it was always Pennywise from the movie adapted to the Stephen King IT. Yes, if something had to be scary, it was that darn clown Pennywise.
You can read the very short Fed statement from their website: Press Release. You can try and decipher the tone, the new words, the extended words and so on. "The Committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run." Only one person on the committee dissenting, Narayana Kocherlakota. Kocherlakota is amazing, the fellow went to Princeton at the age of 15, he had earned a Ph. D in Economics by the time he was 24.