Federal Open Market Committee abbreviation on top of stacks of silver and gold coins

FOMC Fallout: Here We Go Again

As I write this morning, gold has given up two-thirds of its gains following the Fed’s decision last Wednesday to continue its $85 billion-a-month in bond purchases under QE3. One reason for this retreat is that markets overreacted to the news, just as they did back in June when Ben Bernanke’s statement about QE3 was misinterpreted as a signal the Fed would cut back QE3 in September. Buckle your seat belts; we’re in for many more days like Wednesday in the year ahead…

Federal Open Market Committee abbreviation against green background of numbers

Even After the FOMC Decision We’re Still in Suspense

In the wake of the FOMC’s decision, some analysts are lurching to the extreme, speculating that a majority of the FOMC sees the economy as weakening. We won’t know what individual members think about the state of the recovery until the minutes of this week’s meeting are released. But the Fed’s announcement makes it clear a majority of the FOMC believe the economy continues to expand. We also know the FOMC decided to wait for more data before making a decision. There are probably three primary factors that influenced this decision…

Federal Government abbreviation against spreadsheet of numbers

QE3: What’s the Fed Going to Do?

What’ll the Fed do about QE3 when it meets next week? I’ve said before the numbers to watch are those related to employment and the two forces that have driven our anemic recovery—housing and consumer spending. If those numbers indicate the economy is gaining steam, the Fed will start tapering this month. If the numbers cast doubt on the course of the recovery, the Fed is more likely to delay a decision until December.