SubscribeDaily Futures Commentary FINANCIALS March 19, 2009
Thursday, March 19, 2009
OVERVIEW
Following the two-day FOMC meeting, the U.S. Federal Reserve unleashed its most powerful economic package to date as it announced plans to spend a massive amount of money to revive the U.S. economy. The new plan includes purchasing up to $300 billion of long-term treasuries, expanding TALF to include the purchase of other assets, and buying more mortgage securities. When you add it all up, it approaches a staggering $1 trillion of taxpayer money. The tone of the Fed’s announcement and the size of the plan demolished the U.S. Dollar against all major currencies and even versus emerging markets.
In its official statement the Fed cited many reasons for its aggressive action. The number one reason is the economy is still contracting. Jobs are being lost and equity and housing wealth is declining. Tight credit conditions are hurting consumer spending and sentiment. This is leading to lower sales for businesses which have also had a hard time obtaining credit. Consequently, fixed investments and inventories are down. In addition, businesses have stopped hiring.
One should note that the Fed removed language from …
Read More …
Loading ...
