Markets On Edge Before Bernanke Speaks, Stocks Slip
You are missing trading opportunities:
- Free trading apps
- Over 8,000 signals for copying
- Economic news for exploring financial markets
Registration
Log in
You agree to website policy and terms of use
If you do not have an account, please register
A big rally Tuesday had little follow-through on Wall Street Wednesday morning, with U.S. stocks opening modestly lower. The fireworks may come later in the day though, when Federal Reserve Chairman Ben Bernanke is set to face questions at a press conference following the central bank’s latest monetary policy statment.
The Federal Open Market Committee wraps up a two-day meeting and the buzzword is taper, with market watchers waiting to hear whether Bernanke will signal a Fed plan to tap the brakes on its asset purchases. At the moment, the Fed is buying $85 billion in Treasury and mortgage-backed bonds every month, but expectations are that figure could start to shrink as soon as the September meeting.
In recent months, Bernanke has stressed that the Fed’s position on asset purchases can be dynamic with respect to economic data, but that hasn’t prevented brief volatility spikes on any signal of a pullback in stimulus.
“Everyone is waiting on the Fed, plain and simple,” says Tom Essaye. The author of the daily Sevens Report notes that after back-to-back rallies Monday and Tuesday quite a bit of expectation is priced into Wednesday’s statement and press conference. “Given that, I’m a bit nervous we’ll see a “buy the rumor/sell the Bernanke” reaction this afternoon.”
read more ...