Despite reports that the negotiations regarding the “fiscal cliff” are “turning sour”, President Obama and House Speaker Boehner are edging closer to a positive resolution. Our first article this week covers their discussions and Speaker Boehner’s “Plan B”. Next, we have a summary of last week’s announcement by the Federal Reserve to extend its quantitative easing program. The Fed hopes to facilitate lowering the unemployment rate to 6.5% while keeping inflation no higher than 2.5%. We close with a website that provides a snapshot of all of the economic announcements that are scheduled each week. It compares Wall Street’s expectation with the actual numbers that are released.
Boehner Proposes Backup Plan To Avert “Fiscal Cliff” – President Obama and House Speaker Boehner are getting closer to negotiating a means of avoiding the “fiscal cliff”. However, Speaker Boehner is proposing a Plan B as a backup. Even if Plan B is approved by the House, there is little chance it would pass the Senate. http://www.reuters.com/article/2012/12/19/us-usa-fiscal-idUSBRE8A80WV20121219
Federal Reserve Extends Quantitative Easing And Changes Its Targets – Last week, the Federal Reserve met and announced it is adding $45 billion to its monthly purchase of U.S. Treasury Securities. More importantly, it dropped the statement that it will keep rates low through 2015. They are now favoring a target of 6.5% for unemployment and inflation of 2.5%. http://advisorperspectives.com/commentaries/schwab_121312.php
Snapshot Of The Weekly Economic Calendar – This site summarizes the important economic data that is scheduled to be announced in the coming week. This week the important economic data includes the U.S. trade surplus or deficit (current account balance), initial unemployment claims, GDP estimate, and leading indicators among other items. The website shows what the market expects compared to actual results. http://biz.yahoo.com/c/e.html
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John R. Day and Bill Ennis
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