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Daily Market Commentary

The final analysis of the Fed statement yesterday appears to be slightly more hawkish, but mostly balanced.  Specifically noting that they are seeing "some firming in household spending" but added "However, labor markets have softened further and financial markets remain under considerable stress.  Tighter conditions, the ongoing housing correction and the rise in energy prices are likely to weigh on economic growth over the next few quarters" 

The Fed expects inflation to moderate later in the year, but still watches it closely.  "...in light of the continued increases in the prices of energy and some other commodities and the elevated state of some indicators of inflation expectations, uncertainty about the inflation outlook remains high."

 Enough Fedspeak?  The market thought they were going to come out swinging on inflation, and it wasn't as bad as expected.  The US curve steepened a little as the two years rallied after the market realized Bernanke isn't panicking about inflation.

 This morning US GDP came out in line with expectations @ 1.0%  (annualized rate), and personal consumption was 1.1%.  No big surprises here, and bonds are slightly lower, as they were before the number.

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