Despite the strong 3-year auction and weakness in stocks the short end was unable to break out of its pre-FOMC deadlock. The 3-year was already a little higher by the time the $42 billion auction drew to a close and was mostly unchanged by the results, but finished the day a few bps tighter than the auction level.
Eyes will be on the Fed today as the market waits for the committee’s comments regarding bond purchases. They will for sure comment on the progress, but the Fed might not be perfectly clear about whether they plan to shutter the Treasury program after the last of the $300 billion is spent in September or extend it to the end of the year. At this point I think the Fed needs to come out and be pretty clear here. People are certainly expecting to hear something meaningful one way or another, so I fear that saying nothing could just throw a wrench into this market, which would not be good.
Cliff J. Reynolds Jr., Investment Analyst
Eyes will be on the Fed today as the market waits for the committee’s comments regarding bond purchases. They will for sure comment on the progress, but the Fed might not be perfectly clear about whether they plan to shutter the Treasury program after the last of the $300 billion is spent in September or extend it to the end of the year. At this point I think the Fed needs to come out and be pretty clear here. People are certainly expecting to hear something meaningful one way or another, so I fear that saying nothing could just throw a wrench into this market, which would not be good.
Cliff J. Reynolds Jr., Investment Analyst
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