Investor's window  |  February 21, 2013 16:53:30

Fed Minutes? No disaster


On Wednesday night, our time was published the minutes of the January meeting of the American Fed. Detailed description of what bankers discussed the financial markets brought a wave of disappointment. According to Fed Minutes, as it is also called the write, there is between members of the Monetary Committee of disunity in the current issue of the form of quantitative easing. Several bankers have expressed concern about the risks posed to the Fed resulting from this policy and propose its adaptation.

However it must be added that do not appear in the minutes of any specific names or number of members who have expressed their doubts.One can only intuit that Bernanke, Yellen and Evans were, as a long-time proponents of quantitative easing, to continue this policy. Just a reminder: Fed now each month buys bonds worth 85 billion USD, which has meant no time or monetary limit for completion of these operations. Set, however, goals to achieve purchases. This is a decrease in the unemployment rate from the current 7.9% to 6.5% in monitoring the impact on inflation, which should not exceed 2.5% (now 1.6%).

Following the publication of the report is therefore followed by a negative reaction equity and commodity markets and the strengthening of the U.S. dollar.So strong reaction is justified only by the fact that markets are currently moving at very high levels, suggesting that they are very susceptible to correction. Signals from the Fed itself are not so alarming and surprising. It is only logical that the central bankers to discuss all possible scenarios and consider changes to the current policy, depending on how it will develop the real economy. The possibility of changes in quantitative easing by the Fed has provided more flexibility and could also better estimate the market reaction to their actions, which allowed him to effectively target to reduce market volatility.

George Šimara

Analyst Cyrrus

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