FXstreet.com (Barcelona) - Ben Bernanke, during today's round of Q&A at the Senate testimony, mentioned that more QE thru buys of Treasury and/or mortgage backed securities was on the table, as well as, revisions to the extended low-rates policy and a cut to the interest rate paid on excess reserves.
According to NAB Research team: "Though there is nothing new here, in being willing to detail what the Fed might do this is somewhat reminiscent of Jackson Hole in August 2010, where the Fed chairman discussed a range of options, some of which were subsequently acted upon at the November FOMC meeting.
The problem for markets now, as seen by NAB, "is that they are prone to disappointment should the Fed be seen to be procrastinating on August 1st following its next policy meeting."
NAB concludes: "Though the FOMC will have the benefit of seeing the preliminary Q2 GDP print (downgraded) the FOMC is not due to formally recast its economic projections until September. Risk then is that markets now travel hopefully in front of the August meeting (with the USD softer) but are vulnerable to a sell-off out of it."
According to NAB Research team: "Though there is nothing new here, in being willing to detail what the Fed might do this is somewhat reminiscent of Jackson Hole in August 2010, where the Fed chairman discussed a range of options, some of which were subsequently acted upon at the November FOMC meeting.
The problem for markets now, as seen by NAB, "is that they are prone to disappointment should the Fed be seen to be procrastinating on August 1st following its next policy meeting."
NAB concludes: "Though the FOMC will have the benefit of seeing the preliminary Q2 GDP print (downgraded) the FOMC is not due to formally recast its economic projections until September. Risk then is that markets now travel hopefully in front of the August meeting (with the USD softer) but are vulnerable to a sell-off out of it."
