Well, now assuming a surprising behavior of the Fed starting, if it is not in the meeting this week, in the immediate months, rates ascending cycle. What can investors expect? In the event that starts before the stipulated rates ascending cycle, this would be willing as a way of sending a signal to the market that the Fed will seek to limit the inflationary risks and the prices of assets. And given that the effectiveness of the monetary policy for stimulating the economy is low, I understand that they are older the benefits that this can generate above costs in terms of support to the economic recovery. A rise in interest rates can be interpreted by the market as a sign of discipline of the Fed and improve the prospects for the stock market because it would probably mean a strengthening of the dollar and thus would be a limit to the growth of prices of commodites, whose indiscriminate rise threatens the recovery of the global economy. Even though the decision by the Fed on benchmark interest rate generally takes all the attention, this time will be no small matter what decides the Monetary Authority about the continuity or not plan purchases of public debt and corporate bonds. Lyle Gramley, consultant economic senior of Soleil Securities Corp, anticipates the Fed decision and says: clearly the Fed is not going to expand that program, given the improvement in the financial markets that we are observing.
The decision to not extend this plan of purchase of securities can be interpreted as the first step to begin to limit the liquidity of the money market. The output of the Fed from its unorthodox policies is concerned both the market as the decision of the authority on interest rates. Dean Maki, in charge of economic research United States of Barclays Capital, do not trust too much on the timing of the Fed: we are confident that they know how to get out, but we are a little less confident that it will do so in a way in which to avoid a spike in inflation in the medium-term. asset prices and inflationary risks are the main threat on the horizon for the US economic recovery. Although the continuation of low interest rates will allow investors made short-term gains, it puts at risk the possibility of a solid economic recovery, so the stock market will remain vulnerable. These are times of definitions for the Fed where fine tuning of your policy will play a key role. Horacio Pozzo seize this crisis to buy. As our Global value investment newsletter subscribers, and which already recovered its cost by investing in companies that we recommend. Do you want to know what? You can try entering here to find out and start investing in the new recommended in August. You can write me at for more details. Comments on these and other items and the financial and economic news in original author and source of the article.