Saturday, March 18, 2006

Bernanke talks, and the market walks...

Looks like Bernanke will be giving a speech Monday evening that may affect the market for the week to come. Recent data shows a lower consumer price index (CPI) than expected, which made people think twice about future interest rate hikes. The futures market expect the federal fund rate to peak at 5% in may instead of 5.25% in June, which was anticipated earlier this week. The "Federal Open Markets Committee" will be meeting on March 27th and 28th which will be the first meeting with Bernanke. Everyone anticipates a raise up one quarter percent to 4.75%. One expert says the market wants to hear that economic growth is slowing or that inflation is under control. He also says if the market thinks the fed may stop the raises at 5% which would cause major indexes to extend their near five year highs. I'll be anxiously watching...

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