After another long day at work, I was exhausted and was lying on my sofa, half asleep. Bernanke just said that the Fed will keep rates at 0.25% for a few more months. He insisted that inflation is transitory and that the Fed is ready to act when they see signs of peri\sistence in inflation. The fact that the decision to hold rates was unanimous meant that nobody in the FED dared to kill off a nascent economic recovery. After all, unemployment rate was still at 8.8%. The FED won't rest until unemployment falls below 8%.
QE 2 will be allowed to run its course. QE 3 is a possibility if GDP figures turned negative but at the moment unlikely.
I decided that stock markets are likely to be given a lifeline for a few more months. The sectors to target will particularly be precious metals, especially GOLD. So I bought gold call options and bingo, it rose from USD1500/oz to USD1550/oz. Fantastic.
The party may last beyond QE2 because of the low inflation rate in the US and better than expected earnings growth.
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