After QE3 announcement, what do u think about Dow's closing?

[phantom_opera]

up 300
up 200
up 100
flat
down 100
down 200
down 300

[radha08]

ah ben.......the phantom...

[radha08]

hai ya waste time announcement...all playing with words dow up 30 points....time to...

[timmy]

Release Date: September 13, 2012

For immediate release
Information received since the Federal Open Market Committee met in August suggests that economic activity has continued to expand at a moderate pace in recent months.* Growth in employment has been slow, and the unemployment rate remains elevated.* Household spending has continued to advance, but growth in business fixed investment appears to have slowed.* The housing sector has shown some further signs of improvement, albeit from a depressed level. *Inflation has been subdued, although the prices of some key commodities have increased recently. Longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability.* The Committee is concerned that, without further policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions.* Furthermore, strains in global financial markets continue to pose significant downside risks to the economic outlook.* The Committee also anticipates that inflation over the medium term likely would run at or below its 2 percent objective.

To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee agreed today to increase policy accommodation by purchasing additional agency mortgage-backed securities at a pace of $40 billion per month.* The Committee also will continue through the end of the year its program to extend the average maturity of its holdings of securities as announced in June, and it is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities.* These actions, which together will increase the Committee’s holdings of longer-term securities by about $85 billion each month through the end of the year, should put downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.*

The Committee will closely monitor incoming information on economic and financial developments in coming months.* If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of agency mortgage-backed securities, undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved in a context of price stability.* In determining the size, pace, and composition of its asset purchases, the Committee will, as always, take appropriate account of the likely efficacy and costs of such purchases.

To support continued progress toward maximum employment and price stability, the Committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economic recovery strengthens.* In particular, the Committee also decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that exceptionally low levels for the federal funds rate are likely to be warranted at least through mid-2015.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Dennis P. Lockhart; Sandra Pianalto; Jerome H. Powell; Sarah Bloom Raskin; Jeremy C. Stein; Daniel K. Tarullo; John C. Williams; and Janet L. Yellen. *Voting against the action was Jeffrey M. Lacker, who opposed additional asset purchases and preferred to omit the description of the time period over which exceptionally low levels for the federal funds rate are likely to be warranted.

Statement Regarding Transactions in Agency Mortgage-Backed Securities and Treasury Securities (195 KB PDF)

Related Information

FOMC meeting calendars and information

2012 Monetary Policy Releases

[timmy]

hai ya waste time announcement...all playing with words dow up 30 points....time to...

That's becos the effect has been priced in!!! Imagine no QE3 announced today, the market will undergo a noticeable correction.

[primeesense]

Time to buy more property!

M-reits will continue to rise. Dow up 100 i think

[kane]

80pts up. Market has become too reliant on QE.

[timmy]

Time to buy more property!

M-reits will continue to rise. Dow up 100 i think

The weaker the economy, the stronger the asset markets becos of the QEs and OMT.

Yes, markets will chiong!

[CCR]

Low interest till 2015... Free money

[focus]

Low interest till 2015... Free money

Sianz... Fed really pushing everyone into risky assets and they dont care about asset bubbles. They just want everyone to get "wealthy" and then spend more and reflate the economy..

So latest statement is .. he will not take away the accomodative policy even if recovery is in place... Gone liao.. I throw in the towel.. Have to buy something now

[dtrax]

Sianz... Fed really pushing everyone into risky assets and they dont care about asset bubbles. They just want everyone to get "wealthy" and then spend more and reflate the economy..

So latest statement is .. he will not take away the accomodative policy even if recovery is in place... Gone liao.. I throw in the towel.. Have to buy something now

I SCREAM ON BEN'S ICE-CREAM!

[hyenergix]

Sianz... Fed really pushing everyone into risky assets and they dont care about asset bubbles. They just want everyone to get "wealthy" and then spend more and reflate the economy..

So latest statement is .. he will not take away the accomodative policy even if recovery is in place... Gone liao.. I throw in the towel.. Have to buy something now

I threw in the towel a few years ago as I was hurt by low interest rates. But be careful to retain a buffer as we are floating on massive liquidity after all, which might disappear quickly when policies change. Asia will inflate until it is no longer attractive to business and US gets the chance to grow.

[phantom_opera]

Just as market expected, 40b of MBS buying per month ... Pimco is holding lots of MBS ....

Gross,via Twitter, called that “A big #” that amounts to 35% of average monthly mortgage origination. Investment-wise, Gross said to focus on 30-year lower coupon MBS and that he expects Treasury/mortgage spreads to narrow further, which would certainly be to Pimco’s benefit based on its current holdings.

@focus, would MAS depeg from US Fed rate .. I know it is unthinkable

[Laguna]

大家一起发
买金又买银
买屋又买地
钞票当废纸
日日在贬值
物价日曰涨
大家一起冲
赢个满江红

[yowetan]

I am hoping my HDB flat(s) and Flamingo Valley price will grow steadily with the announcement of QE3.

[propertychap]

How can property prices go down with such unlimited money printing?
And interest rate so low till mid 2015 which may extend further?
Should buy now? Or buy gold?

[leesg123]

How can property prices go down with such unlimited money printing?
And interest rate so low till mid 2015 which may extend further?
Should buy now? Or buy gold?

gold, silver already up. but still not yet reach previous high.

[propertychap]

Missed the boat again?

[phantom_opera]

US Fed balance sheet now at 3T, estimate to reach 4T soon

That is scary

[propertychap]

yes scary but should not we join the party and reap some gains before the party ends ?

[phantom_opera]

ST dares not put QE3 on first page ...

[buttercarp]

How come got people vote that Dow will drop?
If got QE 3, then Dow should go up and not down.

[phantom_opera]

because market expects QE infinity ... and what if his amount is not 40b per month but 10b per month ??

[radha08]

US Fed balance sheet now at 3T, estimate to reach 4T soon

That is scary

scary for who..the FED

[radha08]

How come got people vote that Dow will drop?
If got QE 3, then Dow should go up and not down.

shhhh....i think that person is Mr....B....

[august]

ST dares not put QE3 on first page ...

Zaobao did, front page top news.

[focus]

Just as market expected, 40b of MBS buying per month ... Pimco is holding lots of MBS ....

@focus, would MAS depeg from US Fed rate .. I know it is unthinkable

my own guess, i am not working in finance to know the intricacies.
- Currencies are already weighted in a basket and govt maintains competitives thru currency value relative to the other countries thru adjusting the basket.

- MAS and Fed Rate needs to be maintain in my opinion as the govt will not want a carry-trade to appear like what happen for Australia currency versus yen and us. This will jeopardise the currency control(basket weightage) if too much money flow in to take advantage of the spread. ie. we want capital coming in to buy productive assets , not take advantage of the interest rate spread and earn free money.

- This is often mentioned as the unholy trinity .. and singapore has chosen to favour soverign monetary control and free capital inflow over fixed interest rate. Therefore, we are ok to take our cue from the big brothers of the world in terms of liquidity and interest rate ssetting.

[Laguna]

Just as market expected, 40b of MBS buying per month ... Pimco is holding lots of MBS ....

Gross,via Twitter, called that “A big #” that amounts to 35% of average monthly mortgage origination. Investment-wise, Gross said to focus on 30-year lower coupon MBS and that he expects Treasury/mortgage spreads to narrow further, which would certainly be to Pimco’s benefit based on its current holdings.

@focus, would MAS depeg from US Fed rate .. I know it is unthinkable

I read this para 5 times and had hard time to understand.
Could u provide the link.
I dun hv Pimco, somehow, decided not to buy, cannot recall the reason...
so is the QE3 good for Pimco? After Pimco sell their MBS, what can they do? they need to buy lower coupon? then yield drop further???