Investors Look To Fomc Meeting

Investors Look To Fomc Meeting

On a relatively quiet Wednesday for data, investors await the policy statement after the Federal Open Market Committee’s 2-day meeting, which will be released today at 2 PM EDT.

Analysts anticipate the Federal Reserve to end its third quantitative-easing program and indicate a cautious stance toward interest rate timing.

“Given the recent market turmoil, the Fed is likely to reiterate the ‘considerable time’ forward guidance and the ‘significant under-utilization’ description of the labor market,” economists at Danske Bank told MarketWatch.

QE3 likely gone, but not forgotten
Investors are nearly certain the Fed will lift its third round of bond purchasing known as quantitative easing or QE3, reported The Wall Street Journal. But that does not necessarily mean the program has seen its last day.

A number of policy makers believe QE3 augmented hiring and growth while keeping long-term interest rates low since its commencement in 2012. However, those analysts also regard further quantitative easing as a last resort if inflation and growth were anemic and no other economic tactic proved effective.

The first round of bond-buying came in 2008 as a means of stabilizing the economy following the financial crisis. In that case, most economists agree the technique was effectual, but in the two instances since then, opinions are split.
According to Boston Fed President Eric Rosengren, the Fed has reached the necessary criteria to put an end to QE3.

“5.9% [unemployment] relative to where we were when we started the program is a substantial improvement,” Rosengren told The Wall Street Journal. Even if employment rates fell drastically, he continued, he would exercise other options first. “There are other tools that we can use,” like maintaining low interest rates for significant time.

European indices outperform Wall Street
The S&P 500 opened flat this morning, while the Dow gained 0.1% and the Nasdaq fell 0.3%. European markets showed life at the open, as the Stoxx Europe 600 added 0.4%. If the increase holds, it would be the highest close since October 7. Individual nation’s indices performed well, also. The CAC 40 of France gained 0.3%, the DAX 30 of Germany rose 0.8% and the FTSE of the UK advanced 0.7%.

Trade binary options with a US-regulated exchange
There seems to be a great deal of confusion these days regarding the legality of binary options trading in the US. Much of this confusion can be attributed to the rise of off-shore binary options platforms and the off-exchange or OTC contracts they offer. Nadex is based in the US, and is subject to regulatory oversight by the CFTC. These regulatory principles are meant to safeguard traders and their funds and are a key component to Nadex operations.

This information has been prepared by Nadex, a trading name of North American Derivatives Exchange, Inc., prepared by independent third parties contracted by Nadex or reproduced form third party news agencies. In addition to the disclaimer below, the material on this page does not contain an offer of, or solicitation for, a transaction in any financial instrument. Nadex accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication.