The Fed will not start tapering its bond purchasing program in September, just as they will likely find reason to continue or even “expand the program” come December. You’ve spent a considerable amount of time contemplating this as suggested by your local T.V / media / CNBC / clowns but now please….just put it to rest. There is not a single shred of data that could support the Fed stepping away from markets as soon as Sept or Dec for that matter.
Take today for example where the Fed has made 1.5 Billion dollars in outright treasury coupon purchases, and the freakin market can barely even keeps its head above water. 1.5 BILLION DOLLARS JUST TODAY!
Here’s the Fed’s “purchase schedule” link – you can see for yourself.
http://www.newyorkfed.org/markets/tot_operation_schedule.html
If Ben had called in sick this morning, and was unable to make it down to the exchange with his suitcase of 1.5 BILLION DOLLARS in bond purchase confetti where would the market be today?
There is NO ONE ELSE BUYING!
What remains to be seen is what investors reaction will be “now” when the Fed announces “No Tapering”.
Personally – I’d “like” to see the true reflection of such continued actions and would look for markets to interpret this as “things are still 100% totally screwed” and sell like mad but I’m likely dreaming.
Anyway you cut it – it’s bad for USD. It’s bad for USD short term….and it’s very bad for USD long term. Medium term?? – You’ll really need to be careful there.
Kong……..certainly not long.
Thanks for the update Kong! I especially agree with your “dream” scenario in the penultimate paragraph. Also appreciate your clarity on the December timeframe for thinking about stepping up purchases.
I remember the first time I saw that FED QE schedule… my eyes almost popped out of my head.
Yes I think that link does alot of people good to “actually see” the Fed’s activity in markets.
Today’s 1.5 BILLION DOLLARS up in smoke….so – just print a couple more billion and throw it on the heap.
Tomorrow’s amount being somewhere around 4 Billion!
What a plan!
Good plan Kong, I sold USD just before the close on Friday. Good to know that the 900 pound gorilla has joined the party! I have breakout orders in place once momentum starts this next wave down.
Warren
Bingo Warren as I have been layering slowly over several days as well.
Catching this one “should” be another wopper so I’ll be on it like a “hawk?!” – let’s stick with gorilla.
Good luck with your trades ma man!