Stocks, Gold Jump as Latest FOMC Minutes Hint at QE3
Tweet
Share
E-mail
US stocks have risen following the release of the Fed's latest FOMC minutes from the June 21-22 meeting.
The Dow Jones is now up about 53 points, the Nasdaq is up about 1.6, and the S&P 500 is up nearly 6. The SPDR Gold Trust ETF (NYSE: GLD), which opened Tuesday's session in negative territory, is now up 1 percent.
Also notably, gold ramped sharply following the release, now up $23 to around $1,572.60 per ounce.
Several points from the release which could hint QE3 or something along the lines:
Participants also discussed the medium-term outlook for monetary policy. Some participants noted that if economic growth remained too slow to make satisfactory progress toward reducing the unemployment rate and if inflation returned to relatively low levels after the effects of recent transitory shocks dissipated, it would be appropriate to provide additional monetary policy accommodation. Others, however, saw the recent configuration of slower growth and higher inflation as suggesting that there might be less slack in labor and product markets than had been thought. Several participants observed that the necessity of reallocating labor across sectors as the recovery proceeds, as well as the loss of skills caused by high levels of long-term unemployment and permanent separations, may have temporarily reduced the economy's level of potential output.
In the discussion of monetary policy for the period ahead, members agreed that the Committee should complete its $600 billion asset purchase program at the end of the month and that no changes to the target range for the federal funds rate were warranted at this meeting. The information received over the intermeeting period indicated that the economic recovery was continuing at a moderate pace, though somewhat more slowly than the Committee had expected, and that the labor market was weaker than anticipated. Inflation had increased in recent months as a result of higher prices for some commodities, as well as supply chain disruptions related to the tragic events in Japan... Against this backdrop, members agreed that it was appropriate to maintain the Committee's current policy stance and accumulate further information regarding the outlook for growth and inflation before deciding on the next policy step. On the one hand, a few members noted that, depending on how economic conditions evolve, the Committee might have to consider providing additional monetary policy stimulus, especially if economic growth remained too slow to meaningfully reduce the unemployment rate in the medium run. On the other hand, a few members viewed the increase in inflation risks as suggesting that economic conditions might well evolve in a way that would warrant the Committee taking steps to begin removing policy accommodation sooner than currently anticipated.
The full FOMC Minutes can be seen here
The Dow Jones is now up about 53 points, the Nasdaq is up about 1.6, and the S&P 500 is up nearly 6. The SPDR Gold Trust ETF (NYSE: GLD), which opened Tuesday's session in negative territory, is now up 1 percent.
Also notably, gold ramped sharply following the release, now up $23 to around $1,572.60 per ounce.
Several points from the release which could hint QE3 or something along the lines:
Participants also discussed the medium-term outlook for monetary policy. Some participants noted that if economic growth remained too slow to make satisfactory progress toward reducing the unemployment rate and if inflation returned to relatively low levels after the effects of recent transitory shocks dissipated, it would be appropriate to provide additional monetary policy accommodation. Others, however, saw the recent configuration of slower growth and higher inflation as suggesting that there might be less slack in labor and product markets than had been thought. Several participants observed that the necessity of reallocating labor across sectors as the recovery proceeds, as well as the loss of skills caused by high levels of long-term unemployment and permanent separations, may have temporarily reduced the economy's level of potential output.
In the discussion of monetary policy for the period ahead, members agreed that the Committee should complete its $600 billion asset purchase program at the end of the month and that no changes to the target range for the federal funds rate were warranted at this meeting. The information received over the intermeeting period indicated that the economic recovery was continuing at a moderate pace, though somewhat more slowly than the Committee had expected, and that the labor market was weaker than anticipated. Inflation had increased in recent months as a result of higher prices for some commodities, as well as supply chain disruptions related to the tragic events in Japan... Against this backdrop, members agreed that it was appropriate to maintain the Committee's current policy stance and accumulate further information regarding the outlook for growth and inflation before deciding on the next policy step. On the one hand, a few members noted that, depending on how economic conditions evolve, the Committee might have to consider providing additional monetary policy stimulus, especially if economic growth remained too slow to meaningfully reduce the unemployment rate in the medium run. On the other hand, a few members viewed the increase in inflation risks as suggesting that economic conditions might well evolve in a way that would warrant the Committee taking steps to begin removing policy accommodation sooner than currently anticipated.
The full FOMC Minutes can be seen here
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Wells Fargo says CTAs bought US equities, gold and Treasuries
- S&P 500 ends lower as investors weigh data, Middle East tensions
- Goldman Sachs expects July core PCE to rise 0.23%
Create E-mail Alert Related Categories
Fed, Market CheckRelated Entities
FOMC Minutes, Federal Open Market Committee, Standard & Poor'sSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
