6/7/2012 0 Comments
The talk of stimulus has gotten into a fever over the past week. While the markets did see bad news coming out of almost every major economy, the shift to a QE environment may be a bit premature. While China did announce a .25bps rate cut, there is a lot of speculation that today’s fed meeting will bring about more stimulus as well. I think that this will be the case, eventually, but it is risky to think that the Fed and other central banks will think short term as the markets do. The news is bad but may not be enough for the Fed to start a policy now or even talk strongly of one. I think this meeting may come down to perception. I expect stimulus, given the conditions but you have to be prepared for disappointments in the near term (as with the ECB yesterday) and build positions on bad data days.
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