The FOMC released the minutes from the meeting on June 21st – 22nd which gave us a little bit of insight into their thought process for future statements. \u00a0 As it turns out, there really isn’t too much information to pull out of here. \u00a0 However, we will break down each statement with some commentary.<\/p>\n
A FEW ON FOMC SAW CURRENT MONETARY POLICY POSING INFLATION RISK<\/span><\/p><\/blockquote>\n
This seems like a given considering the impressive amount of liquidity that is being pumped into the system. \u00a0 This is also partially why China, Europe and other nations around the world have begun to raise rates while the FOMC has kept the foot on the gas.<\/p>\n
\nFOMC SAW THREAT TO STABILITY FROM FAILURE TO RAISE DEBT LIMIT<\/span><\/p><\/blockquote>\n
The US Government will need to get its act together and raise the debt limit or come up with an alternative solution. \u00a0 The destability this is creating if not solved could wreak havoc on money market funds and the United States’ ability to borrow money in the future.<\/p>\n
\nFOMC SAID EUROPE CRISIS COULD CAUSE SIGNIFICANT `STRAINS’<\/span><\/p><\/blockquote>\n
We have been watching this situation very closely and it does not appear that anything will get solved anytime soon. \u00a0 The only question is how long will the EU \/ IMF keep putting band-aids on the situation before Europe needs major surgical reconstruction or deconstruction for that matter.<\/span>
\n<\/span><\/p>\n\nMOST FOMC MEMBERS EXPECTED `INFLATION WOULD SUBSIDE’<\/span><\/p><\/blockquote>\n
The FOMC and Bernanke have long said that inflation is transitory. \u00a0 This language would suggest that they are continuing to keep that stance. \u00a0 If the dollar continues to strengthen against the Euro as it has over the past few weeks then some inflationary pressures should subside.<\/p>\n
FOMC AGREES ON SEQUENCE OF STEPS FOR EXITING MONETARY STIMULUS<\/span><\/p><\/blockquote>\n
Although this may not be a positive for the equity & fixed income markets, it may be a positive for consumers considering the relief on inflationary pressures that it might provide.<\/p>\n
FED OFFICIALS DIVIDED ON FURTHER STIMULUS IF ECONOMY STAYS WEAK<\/p><\/blockquote>\n
This statements appears to be net neutral considering that they are not sure whether the are going to provide further stimulus or not. \u00a0 However, it is interesting that FOMC members are considering providing further stimulus. \u00a0 The real question is, how will they provide that stimulus.<\/p>\n
\nFOMC MEMBERS FORECAST UNEMPLOYMENT WOULD `DECLINE GRADUALLY’<\/span><\/p><\/blockquote>\n
Most Americans would agree that although a decline in unemployment would be good, we need to get people back to work and fast. \u00a0 A gradual decline may not cut it in this circumstance. \u00a0 We need to implement Fiscal Policy in combination with Monetary Policy to get people back to work. \u00a0 A higher degree of regulation and taxation will only stymie innovation and job creation in the US.<\/p>\n
\nFED POLICY MAKERS SAW PACE OF U.S. GROWTH AS GAINING STRENGTH<\/span><\/p><\/blockquote>\n
We would welcome this strength in growth, as we have seen Corporate America thrive in this depressed market through cost cutting measures, we have yet to see the economic indicators move substantially. \u00a0 America needs to innovate and possibly move back toward a greater amount of manufacturing considering where the US Dollar stands against all major currencies. \u00a0 Currently developed International countries have the ability to purchase US Goods at a discount when considering currency conversion. \u00a0 It would be advantageous to take advantage of this and promote strength in manufacturing.<\/p>\n","protected":false},"excerpt":{"rendered":"
The FOMC released the minutes from the meeting on June 21st – 22nd which gave us a little bit of insight into their thought process for future statements. \u00a0 As it turns out, there really isn’t too much information to pull out of here. \u00a0 However, we will break down each statement with some commentary. […]<\/p>\n","protected":false},"author":371,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[5],"tags":[100,481],"class_list":["post-14042","post","type-post","status-publish","format-standard","hentry","category-economy","tag-economics","tag-economy","et-doesnt-have-format-content","et_post_format-et-post-format-standard"],"acf":[],"_links":{"self":[{"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/posts\/14042","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/users\/371"}],"replies":[{"embeddable":true,"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/comments?post=14042"}],"version-history":[{"count":0,"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/posts\/14042\/revisions"}],"wp:attachment":[{"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/media?parent=14042"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/categories?post=14042"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/tags?post=14042"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}