Home 2021 The Fed Let the World Know it is Not Exiting its Easy...

The Fed Let the World Know it is Not Exiting its Easy Money Policy

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Thursday, Fed Chairman Powell said “now is not the time” to be discussing an exit from ultra-easy monetary policy and promised to give plenty of notice before it begins to debate scaling back its huge bond-buying campaign.

“We know we need to be very careful in communicating about asset purchases,” he said. “Now is not the time to be talking about exit. I think that is another lesson of the global financial crisis, is be careful not to exit too early.”

The FOMC last month pledged to continue to make $120-B in monthly purchases of Treasuries and mortgage-backed securities until there is “substantial further progress” toward employment and inflation goals.

Wednesday, Fed Governor Brainard said the current program will be appropriate for “quite some time“.

Chairman Powell said guidance is not based on any calendar date when the Fed would think about trimming back asset purchases.

We will let the world know,” he said. “We’ will communicate very clearly to the public and we’ll do so, by the way, well in advance of active consideration of beginning a gradual taper of asset purchases.

He reinforced that message Thursday, saying the time to raise rates was “no time soon.”

Thursday, the benchmark US stock market indexes finished at: DJIA -68.95 to 30991.46, NAS Comp -16.31 to 13112.65, S&P 500 -14.30 at 3795.54

The small caps continued their Bull start to the New Year as the Russell 2000 spiked 2.1% on the day.

Volume: Trade on the NYSE came in at 1.04-B/shares exchanged.

HeffX-LTN’s overall technical analysis for the major US stock market indexes is Bullish to Very Bullish in here.

  • Russell 2000 +9.1% YTD
  • NAS Comp +1.7% YTD
  • DJIA +1.3% YTD
  • S&P 500 +1.1% YTD

Looking Ahead: Investors will receive the December PPI, Core PPI, December Retail Sales, Retail Sales ex-auto, November Business Inventories, and January Empire State Manufacturing, followed by December Industrial Production and Capacity Utilization and the preliminary Michigan Consumer Sentiment Survey for January  Friday.

Have a healthy day, Keep the Faith!

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Paul A. Ebeling, a polymath, excels, in diverse fields of knowledge Including Pattern Recognition Analysis in Equities, Commodities and Foreign Exchange, and he is the author of "The Red Roadmaster's Technical Report on the US Major Market Indices, a highly regarded, weekly financial market commentary. He is a philosopher, issuing insights on a wide range of subjects to over a million cohorts. An international audience of opinion makers, business leaders, and global organizations recognize Ebeling as an expert.