Bazooka Hits the Spot

bens bazooka to stimulate economy

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:

  1. Much larger and aggressive move than expected
  2. Buying $40 billion worth of mortgage debt per month with no definative end date
  3. Focus is on improving the employment outlook
  4. Strong short term economic stimulus bound to boost asset prices
  5. 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.