Today’s announcement that the Federal Reserve will extend its Operation Twist caps the news for the past week. We include two articles on this subject in our blog. We also have an update on the European financial crisis with a reference to an article by John Mauldin. We wrap things up with an economic calendar. You may find it as helpful as we do in monitoring the releases of important economic and financial data that could impact the markets each week.
Fed Expands Operation Twist – The Federal Reserve today announced that it will expand its program to replace short-term bonds with longer term debt. This means an increase of $267 billion through the end of 2012. The objective of this program is to continue to drive longer term interest rates down in order to stimulate the economy. Here is a Bloomberg article that discusses the action the Fed has taken. http://www.bloomberg.com/news/2012-06-20/fed-expands-operation-twist-by-267-billion-through-year-end.html
Doug Short’s Take On Federal Reserve Interventions– Doug Short does an excellent job of presenting graphically the impact of Fed interventions on interest rates and the market. He has also included a Wall Street Journal survey of future interest rates. It shows gradual increases over the next few years. http://advisorperspectives.com/dshort/commentaries/Fed-Intervention-Update.php
John Mauldin Believes The “Bang!” Moment Is Here – He writes this week that the European debt crisis is at the “Bang!” moment where confidence collapses, lenders disappear and a crisis hits. He quotes from the work of Carmen Reinhart and Ken Rogoff, who wrote a book called This Time is Different. The book is an interesting history of financial crises. http://www.mauldineconomics.com/frontlinethoughts/the-bang-moment-is-here/
Economic Calendar – Every day we review the economic calendar for important announcements that may affect the market. One of the calendars we like is on Yahoo Finance. This calendar shows what announcements to expect for the week and is updated throughout each day. Key economic numbers which may generate announcements include GDP, unemployment claims, leading indicators, building permits and those relating to business and consumer confidence. http://biz.yahoo.com/c/e.html
We hope you enjoy reading along with us some of the articles that keep us up-to-date on the economy and the markets. Please call or email us if you have any questions.
John R. Day and Bill W. Ennis