The markets roared today after the Philadelphia Federal Reserve announced better than expected news in its area manufacturing figures.
At the closing bell, the Dow Jones Industrial Average rose 108.88 points to finish at 16,331.05. The Nasdaq increased 11.68 points to finish at 4,319.29, while the S&P 500 added 11.24 points to close at 1,872.01.
The end of today's Federal Open Market Committee (FOMC) meeting included fresh dovish language in its policy statement - but the market-friendly attitude failed to excite investors who were hoping for more.
As widely expected, the U.S. Federal Reserve announced it will stay the course on its bond tapering. Anticipated - but not as expected - the policy statement shed some light on eventual interest rate hikes.
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The markets crumbled today after the Federal Open Market Committee (FOMC) indicated a dovish approach to economic policy. At the closing bell, the Dow Jones Industrial Average fell 114 points to finish at 16,222. The Nasdaq slumped 25 points to finish at 4307, while the S&P 500 lost 11 points to close at 1860.
The FOMC moved the goal posts on Wednesday, altering its view of when the central bank should raise interest rates. At its first meeting with new Chair Janet Yellen at the helm, the committee elected to trim its asset-purchasing program (quantitative easing) by another $10 billion to $55 billion per month.
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On Friday, the U.S. Federal Reserve released the transcripts from its vital meetings over the state of the U.S. economy from 2007 through 2009.
The transcripts provide a staggering glimpse into the world of a central bank in crisis, or at least the inability for all parties concerned to grasp the problems at hand.
Here are the five most ridiculous takeaways from the Fed Reports.
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The Federal Reserve went forward with its taper plans yesterday, announcing it would reduce its bond-buying by $10 billion per month. But that is no guarantee the Fed will continue to taper, especially if the economy falters. And now that the Fed has a new chief in Janet Yellen,
we could be in for some surprises this year...
Now that we have the minutes from the Fed's December policy meeting, we can figure out what they have in mind for 2014, right? Unfortunately, no. In fact, Money Morning Chief Investment Strategist Keith Fitz-Gerald thinks the FOMC members are "making it up as they go along."
But that's no excuse for investors not to have a plan...
Stock market news today, Oct. 30: Stocks are fairly steady today as investors await the Federal Reserve's next decision on whether to taper its massive bond-buying program, with general expectations being that tapering will be delayed until 2014 amid the recent onslaught of more negative economic indicators.
For several months, investors have had difficulty deciphering how the Fed will pare back this stimulus program, and confusion persists today. Some say tapering may begin at the next Fed meeting in December, while others are predicting next January or March.
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Another FOMC meeting is in the books, and to no one's surprise they decided to stay the course. That will weaken the U.S. dollar, which definitely has its risks, but can deliver profits for currency traders who know how to play it.
This window of opportunity won't stay open for long, however...
In one of the most highly anticipated releases of the year, the Federal Open Market Committee (FOMC) meeting minutes from July 30-31 were released today (Wednesday).
They will be picked apart for days - but here's what you need to know.
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After the two-day FOMC meeting, the committee just backtracked on all the previous taper talk - here's why the Fed might be "winging it."
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Says Obama:
Larry Summers for Fed Chief... He's got my vote. Absolutely!
Why? You just have to get to know the guy and you'll see he's perfectly qualified to head the Federal Reserve.
Here's just part of his resume.
From 1982-1983, Larry Summers was on staff at Ronald Reagan's Council of Economic Advisers. That's where Lawrence of Enablers earned his "Deregulate Everything" T-shirt.
After his brief stint on the Gipper's Council, where he was taught how real pros corral free markets for personal profit, the Enabler headed back to Harvard to teach kids (and himself) how to squeeze personal wealth out of mere economic theory.
He got his next shot at stardom as Chief Economist of the World Bank in 1991. He was there until 1993.
While there he wasted no time shining a light on himself.
In a 1991 interview he famously said:
Read on here...
The stock market today is off to a sluggish start as investors brace for a week of important economic indicators.
Pending homes sales kicked off a week of tell-tale economic data this morning, while earnings season continues with Wynn Resorts Ltd. (Nasdaq: WYNN) reporting disappointing Q2 results.
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There's considerable dissension within the ranks at the Federal Reserve, with many of Chairman Ben Bernanke's colleagues saying the Fed's monthly purchase of $85 billion in bonds should end by late this year.
"About half" of 19 Fed members "indicated that it likely would be appropriate to end asset purchases later this year," according to minutes of the June Fed policy-making committee meeting, released Wednesday.
Ending QE3 could have enormous implications for the stock market - whose four-plus-year bull market has been buoyed by the central bank's stimulus - and for the economy as a whole.
But while there's growing sentiment inside the Fed to end QE, a majority of the 12 voting members of the policy-making Federal Open Market Committee hope to extend the bond-buying into next year.
Still, the Fed's June 18-19 meeting could prove to be a turning point, given the amount of discord at the meeting.
The minutes add some context to Bernanke's comments at a press conference immediately after the meeting in which he said the Fed could begin scaling back QE3 this year and end it altogether by mid-2014.
The markets dipped immediately after Bernanke's comments but then recovered some.
"To me, the real news is that you've got dissension inside the Fed now," said Money Morning Chief Investment Strategist Keith Fitz-Gerald. "My initial read is there's a lot more dissension than usual.
"And," Fitz-Gerald said, showing his longtime disdain for the Fed, "the level of dissension reinforces the notion that they don't know what they're doing and they're making it up as they go along."
Money Morning Capital Wave Strategist Shah Gilani, meanwhile, said the June FOMC showed legitimate concerns among members.
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As a service to Money Morning readers, we are providing the Federal Reserve FOMC meeting schedule.
The U.S. Federal Reserve's Federal Open Market Committee (FOMC) is a 12-member board within the Federal Reserve system that meets eight times a year to set policy.
In addition to the regularly scheduled meetings, the FOMC can call other meetings as needed. The minutes of a regularly scheduled FOMC meeting are released three weeks after the date of the policy decision.
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