In my opinion, it wasn't so much what Benancke did in implementing Operation Twist 2.0 that should be the headline of yesterday's events but what was said in the statement after the meeting. In this statement the Fed changed its wording about downside risks when compared to the August 9th meeting. In yesterday's statement the Fed said:
...there are significant downside risks to the economic outlook, including strains in global financial markets.While back in August the excerpt in the section of the announcement read:
...downside risks to the economic outlook have increased.The increased clarity that the Fed provided yesterday with this statement is not common as their intentions usually are not to rattle markets. It almost seems as if Bernancke is throwing in the towel and saying look I've done all I can do, it is up to you jokers in Washington to stop bullshitting, put politics and party aside, and start worrying about the country that you've been elected to serve.
Based on today's market reaction I think it's safe to say that investors around the globe are saying we're screwed.
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