Saturday, April 01, 2006

Dollar Wakes as Big Ben Rings

Fed Chairman Bernanke’s speech this evening was not one from which the market was ready to glean the Chairman’s assessment on the state of the US economy as it was scheduled 1 week before the FOMC decision.

Instead, the Fed Chairman stuck to explaining the cause of the generally low levels of long-term interest rates and of the flat and recently inverted shape of the yield curve. Bernanke sounded off the oft-mentioned reasons for low long term rates, namely: stable inflation; pension funds’ demand
for long-term securities in light of demographic changes; increased demand for US Treasuries relative to the issuance of new supply and; to a lesser extent foreign accumulation of dollar reserves.



He also said rising demand for long term securities was due to falling risk premium, which is more likely to be the result of falling interest rate risk than falling inflation risk.

Bernanke challenged the notion that inverted yield curves signaled a significant economic slowing as was in the past episodes because current interest rates “are relatively low by historical standards”.

More Read Forex trading directory

2 Comments:

Blogger vdvvdv said...

forex trading

4:19 AM  
Blogger Steve said...

Well.... round about every blog posts online don't have much originality as I found on yours.. Just keep updating much useful information so that reader like me would come back over and over again.
………………
forex trading Robots

5:29 AM  

Post a Comment

<< Home