Thursday, 21 June 2012

Parsing FOMC June 2012

FT Alphaville analyses the June FOMC statement   -   Here

So no new grand QE, but an extension of Twist.

Gold had a muted response so far, twist not enough, but no crushing disappointment.

I sense the FED need to point to more control of inflation / clear deflationary risk.

So August for the next guessing games, or events dear boy, events?
Gold's "triangle" is coming to an end anticipating a strong break, up or down?

Alphaville notes

The changes are unsurprisingly dove-ish, and although they don’t outright signal further easing (QE3) at a later meeting, they certainly lean in that direction.
1) The key new sentence is this: “The Committee is prepared to take further action as appropriate to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability.”
2) The Committee now anticipates that unemployment will fall “only slowly” rather than “gradually”.
3) Inflation has declined since the last meeting, before which it had “picked up”.

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