Federal Reserve Chairman Ben Bernanke is speaking at the annual Jackson Hole
conference, and enough people in the market believe he will say something that
will suggest he will do another round of quantitative easing. As a result, the
market has moved up and now sideways. Bernanke is boxed in. He has already said
he will keep interest rates near or at zero for at least two years, which tells
traders two things: The economy is quite weak, and if you want to make money,
buy assets other than Treasuries. The market traded down on the comments on the
economy, then traded up on a silly hope he will say something that creates some
liquidity for an already liquid market. Bernanke will probably use some words or
phrases that give traders hope he will ease some more. He also will reiterate
his real worries about the economy.
No comments:
Post a Comment