The Federal Reserve Open Market Committee regularly scheduled two-day meeting begins om Tuesday.
The FOMC is scheduled to issue a statement at 12:15 ET, followed by press conference by Chairman Ben Bernanke at 2:15 ET.
No changes in interest rate policy are expected. However, some comment on the end of QE2 is likely. Given that there is $1.6 trillion in excess reserves that could hit the economy at anytime, the ending of QE2 should be an afterthought and has little significance relative to the excess reserves that could hit the economy. However, expect the media to play up the ending of QE2, big time.
$1.6 trillion of excess reserves has already hit the economy through the other side of the Fed's balance sheet. Most of it bridges the government deficit. It is already doing its inflationary work. The only thing you can say is that the excess reserves have not been geared up into bank credit.
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