“Like we did last summer…” That song lyric may as well be Ben Bernanke’s theme song. Well the data so far this week suggests that the Federal Reserve will continue their policy called “The Twist.” If you are not familiar with this policy, it is when the Fed sells short term Treasuries and buys longer term bonds. They do this to drive down the longer term interest rates and stimulate the economy. With this week’s data and the subsequent reaction in the markets, the Fed may have more of an opening to exercise QE3.
Last Monday, the US Manufacturing activity dropped unexpectedly to the lowest levels since July 2009. The… Continue Reading
