FOREX - Trends, Forecasts and Implications (Episode 19: September 2012) - page 301
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
heaven is for the blissful )))) I'll stay in the astral ... it's more fun there ))))
the average person isn't going anywhere. i hate to break it to you, but a person is a collection of molecules and atoms. (distillation... all that stuff)
Hi Margo....looks to me like there should not be much upside...let's see...
Hi!
Let's think: How long can QE last?
On the one hand, the buying rate of $40bn a month looks small compared to $75bn a month under QE2 and $100bn under QE1. On the other hand, this time the US central bank did not name a date for the end of QE, only a condition - "a significant improvement in the labour market".
It could be that Bernanke's term will end before QE3. Recall that Bernanke is currently serving his second term, which will expire in January 2014. According to analysts' calculations, depending on what the Fed means by "substantial" and how long it will take for the American economy to reach this state, the total size of the third round of easing could be $1.2-1.7 trillion and above, i.e. comparable in size or even surpass QE1. Of course, experts' estimates differ, but most experts believe QE3 will exceed at least the size of QE2 ($600 billion).
Most likely, the QE3 programme will not have an immediate effect because the main source of uncertainty for the US is the fiscal issue, or fiscal cliff, and the outcome of the presidential election - until these issues are resolved, this very "substantial improvement" is unlikely to happen.
In theory, the Fed still has room to buy bonds: Inflation remains below the Fed's 2% target - the core Personal Consumption Expenditure Price Index (PCE) was 1.3% (YoY) in August. Furthermore, as Bernanke stated, the Fed can tolerate a higher rate of increase in consumer prices for some time. Another important point: Economists estimate the size of the mortgage-backed securities market at more than $7 trillion, which means that the Fed has plenty of room for action on this parameter as well.
The Fed members themselves did not express their expectations regarding the size of QE3, but some conclusions can be drawn from their economic forecasts. Thus, only three FOMC members think that unemployment rate may fall by more than 0.5 percentage points by the end of next year - it is a very bad expectation. So the Fed is set up for a massive and therefore very long-lasting stimulus.
Capital Economics observes that if the Fed considers the unemployment rate of 7% acceptable (this is the number repeatedly mentioned by Fed Chairman Evans), bond purchases will continue up to the end of 2014. If that figure is lower, the easing might well continue until mid-2015. The central bank has just announced that it plans to keep interest rates at record lows just until then.
In any case, Bernanke was wise not to specify a timeframe for QE3: the doves will be happy that easing can last and the hawks will be happy that if things improve, the program will be immediately phased out.
I hate to disappoint you - but a person is a collection of molecules and atoms. (distillation... all that)
Yes, I remember )))) I think the hot tub is made of gold? )))
why not? )))) what's wrong with a tub like that? and a negro with a fan to serve me drinks... I already have my own fireman ))))
why not? )))) What's wrong with such a tub? And a negro with a fan will serve me drinks... I already have my own fireman ))))
I hate to disappoint you - buta person is a collection of molecules and atoms. (distillation... all that)
I hate to break it to you, but that's not the case.
I have a feeling that the moderator's patience is about to run out and his anger will be terrible.
A negro is never superfluous ))))
I have a feeling that the moderator's patience is about to run out and his anger will be terrible.
I don't care.
In five years, there is not a single atom left in the human body that was there five years ago. The human body is a process.
QE3
ECB's promise of an unlimited buyback of troubled eurozone bonds
= a tug of war...