fed stimulus program continues
DESCRIPTION
http://www.profitableinvestingtips.com/bond-investing/fed-stimulus-program-continues Fed Stimulus Program Continues Watching the Fundamentals It appears that the Federal Reserve is doing when we continually advise investors to do, fundamental analysis. Putting political concerns aside it appears that the Fed is going to continue its program of pumping money into the bond market until unemployment improves more and the economy moves further out of recession. On a fundamental analysis note, investors owning dividend stocks will likely see the value of their investments rise as bond yields fall and bond values rise. The current front runner to replace Mr. Bernanke at the Fed is Janet Yellen, the Fed vice chairman. Ms. Yellen was instrumental in developing the stimulus policy of quantitative easing. Many experts believe that she will likely follow the conservative course of Mr. Bernanke in not starting too soon or going too fast. As the Fed stimulus program continues traders will wisely watch the economic fundamentals for clues as to when the pullback will occur. Those who follow market sentiment instead will likely be caught off guard as were many who found themselves in short positions and lost money when the Fed acted rationally.TRANSCRIPT
Fed Stimulus Program Continues
Bywww.ProfitableInvestingTips.com
On news that the Fed stimulus program continues unchanged the bond market
rallied.
http://www.profitableinvestingtips.com/bond-investing/fed-stimulus-program-continues
Yields fell and bond prices rose.
http://www.profitableinvestingtips.com/bond-investing/fed-stimulus-program-continues
Buyers outnumbered sellers as the bond market experienced its biggest
one day jump in nearly two years.
http://www.profitableinvestingtips.com/bond-investing/fed-stimulus-program-continues
The Fed stimulus program continues unabated when virtually no one thought
that it would.
http://www.profitableinvestingtips.com/bond-investing/fed-stimulus-program-continues
The central bank published minutes of its last meeting at which it decided to
continue its $85 Billion a month purchase of mortgage securities and
treasuries.
http://www.profitableinvestingtips.com/bond-investing/fed-stimulus-program-continues
This policy is widely credited with helping the US economy climb out of
the recession and lift the stock market on a months-long rally.
http://www.profitableinvestingtips.com/bond-investing/fed-stimulus-program-continues
Ben Bernanke, the soon to leave Fed Chairman
, gave a press conference just after the info was announced and stated that the economy is not quite to the point where the Fed will choose to start tapering off
on its stimulus program.http://www.profitableinvestingtips.com/bond-
investing/fed-stimulus-program-continues
The interpretation of bond traders is that the economy is not likely to pick up
enough steam soon enough to prompt the Fed to pull the trigger on a stimulus
cutback.
http://www.profitableinvestingtips.com/bond-investing/fed-stimulus-program-continues
The end-of-day ten year note rate was just under 2.7% as opposed to around
1.6% in May of 2013 when the market first anticipated a drawback in the
quantitative easing stimulus program.
http://www.profitableinvestingtips.com/bond-investing/fed-stimulus-program-continues
Watching the Fundamentals
http://www.profitableinvestingtips.com/bond-investing/fed-stimulus-program-continues
It appears that the Federal Reserve is doing when we continually advise
investors to do, fundamental analysis.
http://www.profitableinvestingtips.com/bond-investing/fed-stimulus-program-continues
Putting political concerns aside it appears that the Fed is going to
continue its program of pumping money into the bond market until
unemployment improves more and the economy moves further out of
recession.
http://www.profitableinvestingtips.com/bond-investing/fed-stimulus-program-continues
On a fundamental analysis note, investors owning dividend stocks will
likely see the value of their investments rise as bond yields fall and bond values
rise.
http://www.profitableinvestingtips.com/bond-investing/fed-stimulus-program-continues
The current front runner to replace Mr. Bernanke at the Fed is Janet Yellen, the
Fed vice chairman.
http://www.profitableinvestingtips.com/bond-investing/fed-stimulus-program-continues
Ms. Yellen was instrumental in developing the stimulus policy of
quantitative easing.
http://www.profitableinvestingtips.com/bond-investing/fed-stimulus-program-continues
Many experts believe that she will likely follow the conservative course of Mr. Bernanke in not starting too soon or
going too fast.
http://www.profitableinvestingtips.com/bond-investing/fed-stimulus-program-continues
As the Fed stimulus program continues traders will wisely watch the economic fundamentals for clues as to when the
pullback will occur.
http://www.profitableinvestingtips.com/bond-investing/fed-stimulus-program-continues
Those who follow market sentiment instead will likely be caught off guard as
were many who found themselves in short positions and lost money when
the Fed acted rationally.
http://www.profitableinvestingtips.com/bond-investing/fed-stimulus-program-continues
When Will It End and to What Effect?
http://www.profitableinvestingtips.com/bond-investing/fed-stimulus-program-continues
The Fed stimulus program continues because the US economy is still not
totally mended from the damage of the 2008 market crash and ensuing
recession.
http://www.profitableinvestingtips.com/bond-investing/fed-stimulus-program-continues
And, one of the dangers to the US economy is the huge amount of US
debt.
http://www.profitableinvestingtips.com/bond-investing/fed-stimulus-program-continues
On one hand running up more and more does not seem like a good idea.
http://www.profitableinvestingtips.com/bond-investing/fed-stimulus-program-continues
On the other hand driving interest rates down has the effect of lessening the
interest burden of the US debt.
http://www.profitableinvestingtips.com/bond-investing/fed-stimulus-program-continues
To the extent that the same policy drives down the value of the US dollar it
further reduces the value of US debt held offshore in countries like Japan,
Taiwan, and China.
http://www.profitableinvestingtips.com/bond-investing/fed-stimulus-program-continues
These nations and others have routinely manipulated their currencies to keep
them weak in relation to the US dollar.
http://www.profitableinvestingtips.com/bond-investing/fed-stimulus-program-continues
This has helped their imports and given them huge currency reserves, primarily
in US dollars.
http://www.profitableinvestingtips.com/bond-investing/fed-stimulus-program-continues
To the extent that the Fed stimulus program continues it may serve to
reduce the value of offshore debt to the betterment of the US economy.
http://www.profitableinvestingtips.com/bond-investing/fed-stimulus-program-continues