La salita del dollaro è la chiara evidenza di una mancanza di fiducia nel comportamento dei banchieri centrali e solo fatti concreti faranno cambiare direzione in maniera decisa, almeno per me, probabilmente unito ad utili del settore finanziario almeno meno peggio del previsto.
Once Again, a Friend in Ben
Posted by David Gaffen
Those who have complained on-end about Federal Reserve Chairman Ben Bernanke’s seeming reticence to get aggressive and cut interest rates sharply are celebrating now, as stocks have posted a sharp reversal on his comments, where the Fed head embraces the idea of more interest-rate cuts.
Mr. Bernanke is not scheduled to speak until 1 p.m. ET, but his comments are out now, and they pretty much suggest that the Fed will be cutting rates — and their tenor has increased market odds on a half-point interest-rate cut at the end of the month.
The Bernanke bounce.
“In light of recent changes in the outlook for and the risks to growth, additional policy easing may well be necessary,” he said. “We stand ready to take substantive additional action as needed to support growth and to provide adequate insurance against downside risks.”
The Dow was lately up about 90 points, after spending most of the morning in negative territory. Futures traded on the Chicago Board of Trade were putting 90% odds on a 0.5 percentage point cut in the federal-funds target at the January 29-30 FOMC meeting, compared with 88% odds yesterday.
His remarks highlight the problems in the economy that have motivated investors to reduce stock holdings in recent weeks — namely, that what was initially a credit crunch appears to be easing, while the outlook for growth has deteriorated.
“On the whole, despite improvements in some areas, the financial situation remains fragile, and many funding markets remain impaired,” he said in comments. “Adverse economic or financial news has the potential to increase financial strains and to lead to further constraints on the supply of credit to households and businesses.”
“While inflation is of course being monitored, it is clear that growth concerns dominate,” notes Marc Chandler, head of foreign exchange strategy at Brown Brothers Harriman.
