October 7, 2015

Will Fed ease or tighten

I've often described the market as being without memory from day to day.

Well, maybe the Federal Reserve has the same problem.

Not long ago, the Fed left interest rates unchanged. But during a news conference following that decision, Fed Chair Janet Yellen didn't totally dismiss the possibility of more quantitative easing or rule out negative interest rates (although she said the central bank hadn't discussed it).

Since then, we've heard several "Fed heads" say that they're still looking to raise rates this year.

Didn't they hear themselves (through Yellen) only days before talking gloomy, gloomy, gloomy? IMF chief Christine Lagarde chimed on this theme in today as well.

I for one don't believe even the Fed knows what it will do. I sure don't, so why would anyone risk serious and hard-earned capital during this uncertain period?

As I said, it seems to me that not only does the market and traders/investors have no memory from day to day, but so does our own Fed.