The game of Guess the Fed is in full swing causing heartburn around the world. Yesterday a short article was published in the FT (Financial Times) that caused stocks to move lower and rates to rise. The author said Fed Head Bernanke would talk about tapering asset purchases based on future data. The Fed will absolutely adjust monetary policy as the economy improves, that is basis economics. However, for a moment, the market believed the author had "special powers" into the heads of the Feds. After the global markets came unhinged he tweeted, yes tweeted, that he had no special insight and was only talking basic economics. Stocks recovered however bonds could not get up. This is a prime example of the volatility we are facing as the economic data improves. A good economy is what we need so calm down everybody.
Posted on: Tue, 18 Jun 2013 15:42:28 +0000
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