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Fed Kicks Can Down Road On Unwinding Balance Sheet, Signals Rate Hike Pause

Today’s Fed minutes from their July meeting reveal that most Fed officials wanted to wait until the next monetary policy meeting to unveil its plan to unwind a massive $4.5 trillion in bonds – kicking the can down the road for a possible September announcement.

The Fed also discussed surprisingly low inflation, with a few officials noting that they could take their time before hiking rates again. 

Stocks skidded earlier in the day on news that President Trump disbanded a pair of advisory panels amid a mass Exodus of corporate leaders, following comments Trump made in the aftermath of the violence in Charlottesville, VA over the weekend.

Via Marketwatch:

The latest drama has sparked nervousness over the possible derailment of Trump’s economic agenda, including tax and regulatory reforms, said Kent Engelke, chief economic strategist at Capitol Securities Management.

Still, recent trading has had an upward bias, even given an uncertain geopolitical environment that pressured stocks last week. The Dow has risen in 13 of the past 16 sessions, excluding Wednesday, and major indexes are within striking distance of record levels.

Even news that housing starts fell 5.6% in July isn’t dragging on the market as the weak number is a result of tight supply rather than weak demand, according to Engelke.

 

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One comment

  1. it is showtime

    fed is Not doing everything they can to disrupt trump, as I said many months ago
    the turn to increasing fed funds after 9 years of lowering was not coincidental
    they are tightening the screws (at the same time jerking the mountaintop 4000 dow pts higher since Nov) but the blame and root needs to be on trump. not fed. once again correct

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