As widely expected the US Federal Reserve Chairman, Ben Bernanke concluded his two-day Federal Open Market Committee meeting with new monetary direction:
Key points:
- Much larger and aggressive move than expected
- Buying $40 billion worth of mortgage debt per month with no definative end date
- Focus is on improving the employment outlook
- Strong short term economic stimulus bound to boost asset prices
- Low interest rates to remain until at least 2015
Bottom line:
Good for market in mid-term (3-6 months) but already priced into market in the short-term and our data continues to give high risk to reward till US elections in November.