« Gold, Gold, Gold | Main | Know More Media »

Dec13
FOMC Decision

The FOMC raised the Fed Funds rate to 4.25% today. They removed the language from their statement that implied their rates were accommodative (read low). They kept in language that measured increases might still be necessary. That means that more Fed tightening is probable.

 The stock market liked the change in wording and rallied nicely on the news. The bond market also liked the news initially and rallied, but gave up most of the gain in less than an hour. What was the difference in reaction?
 
The stock market is reading the statement as saying that the Fed is almost done with tightening. That means that the market can continue to grow unfettered. So, stocks are worth more. That’s why we rallied.
 

The bond market looked at the statement and saw that the Fed might still need to fight inflation. That means rising interest rates. That means falling bond prices. So, the bond traders went almost back to where they were before the statement.

 Where does that leave us?
 

Slightly positive on stocks through the end of the year, bearish on bonds for the foreseeable future (at least next six months).

 

0 Comments/Trackbacks




submit a trackback

TrackBack URL for this entry:

post a comment

Name, Email Address, and URL are not required fields.





Comment Preview

« Gold, Gold, Gold | Main | Know More Media »

Advertise

Related Resources

sponsored ads



Incredible Hall of Acclaim.

subscribe


Prefer Email?
Subscribe below-

Enter your Email:


Powered by FeedBlitz What's this?

Current News

Support This Blog

business social media

Use these fast growing business social media sites to promote your business, feature your products, spotlight your business leaders, create links, and drive traffic back to your company site, all for free!

BIZZlogos - Add your logo - free link to your site
BIZZphotos - Add photos of your products and people
BIZZprofiles - Submit your profile and build your online visibility
BIZZspotlight - Spotlight your business with free links
BIZZvideos - Videos about businesses, products and business people.
BIZZbites - "Digg" for Business - Submit your articles and posts

know more media network

View Network Map

Network Feed List (OPML)

Know More Media Network
Feed


we support unitus

PRWeb

Influencer



GrowYourFunds is a member of the Know More Media network of business related blogs.

Here are some current headlines from some of our business publications:

ProductivityGoal

CallCenterScript

AdHurl

TheBizofKnowledge

LandingTheDeal

CustomersAreAlways

HealthCareVox

WebMetricsGuru

TheInsurancePolicy

MarketingBlurb