FOMC Statement | stockbee


FOMC Statement

The Federal Open Market Committee decided today to keep its target for the federal funds rate at 5-1/4 percent.

Recent indicators have been mixed and the adjustment in the housing sector is ongoing. Nevertheless, the economy seems likely to continue to expand at a moderate pace over coming quarters.

Recent readings on core inflation have been somewhat elevated. Although inflation pressures seem likely to moderate over time, the high level of resource utilization has the potential to sustain those pressures.

In these circumstances, the Committee's predominant policy concern remains the risk that inflation will fail to moderate as expected. Future policy adjustments will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Thomas M. Hoenig; Donald L. Kohn; Randall S. Kroszner; Cathy E. Minehan; Frederic S. Mishkin; Michael H. Moskow; William Poole; and Kevin M. Warsh.

2007 Monetary policy


F. said...

The blogger sentiment poll shines once again!

Pradeep Bonde said...

It is never easy playing short side.

F. said...

I remember when Trader Mike tried to cut you down for pointing out the contrarian use of the blogger sentiment poll in its infacy. I bet he feels like schmuck now.

It seems to me that several of the bloggers are participating in a "good old" boys club. Kind of pathetic if you ask me.

Alok said...

f - how can i find the blogger sentiment? TIA.

KN said...

Pradeep Bonde said...

That poll is a complete joke. Prominence and popularity in blogging has absolutely nothing to do with profitability or ability to trade profitably.

Some of the most prominent and popular bloggers have been persistently and chronically wrong with their market forecast. I have seen the newsletters of most of them as readers keep sending me copies of them or want second opinion on the stocks mentioned. Very few of them have consistent methodology. But the followers worship them with fervor. The joke is on the followers.

The prominent bloggers are good at creating a cult. The followers of such cults suspend their judgement and independent thinking and blindly follow them. The psychological reward to being a follower of prominent bloggers are more important to some traders than the profits which they can make from profitable trading.

NO DooDahs said...

It is interesting that just two posts before this one, there was a post titled "down move may be just around the corner" and this last week's price action had Pradeep fooled, just like it did a lot of people. F., should that post have been viewed from a contrary nature?

Pradeep Bonde said...

No DoohDahs
Contrary opinion by definition is "Contrary opinion is the opposite opinion of the sentiment held by the majority."

The prominent/popular blogger sentiment represents majority opinion.

NO DooDahs said...

Ah, so as of Tuesday's post, you were actually WITH the "majority" in taking a bearish stance on the markets ...

Pradeep Bonde said...

My post is pretty clear, it is anticipating shakeout and is bullish on individual stocks.

"Another low volume up day for market. Moves like this on low volume have high probability of failure. Those becoming comfortable with long side might find a nasty surprise in a day or two.
The 50% plus in a month reading is currently at 3. The indicator has been around this reading for sometime and a down move here might washout pre mature bulls and set up for sustainable bounce. Individual stocks are worth examining for buys here. The fresh breakouts are from new sectors and unlikely to be affected by a shakeout."

No amount of defense of the blogger sentiment poll by those actively participating in it going to help put lipstick on that pig. It is simply as I said many many month ago a good contrary indicator because prominent bloggers have been persistantly and chronically wrong on market direction since it started.
From my original poston November 13, 2006:

"Popular blogs may not be the best place to find profitable ideas. This poll has become a good short term contrary indicator. Every time it gets released and shows that the popular bloggers are bearish, the market pops. Ever since it started the popular blogger sentiment has been more or less negative and the market has kept going up.

What determines popularity. Bearish blogs are more popular. Blogs which are wrong for over a year are more popular. Blogs which promote conspiracy are more popular. Blogs which offer newsletters are more popular. Blogs good at marketing are more popular. So if you don't want to beat the market just follow the popular blogs!!!"

Since then it has reinforced every week that observation.

NO DooDahs said...

Oh, I think you have my position incorrect. I'm not trying to defend the poll. I'm also not taking umbrage with your point about certain individual stocks possibly being insulated from a downturn because of their individual catalysts.

I'm specifically attacking your overall market assessment as being WITH the majority as defined by that poll, as of Tuesday's post.

Your assessment of the "overall market direction" was bearish and anticipating a down move, "high probability of failure" I believe were your words, therefore your assessment of overall market direction as of Tuesday was with the majority and could have been considered a part of the contrary indicator. After all, the poll was published Monday morning, before your stated "high probability of failure" assessment for the up move.

I've been critical of the poll before, in my blog and elsewhere, possibly even in previous comments here and definitely in comments at Mike's. I'm just pointing out that they're not the only ones capable of being fooled by the market.

Pradeep Bonde said...

Oh I see. The poll does not affect my daily analysis. I don't even monitor it now days.
My most reliable indicator is 50% plus in month. Once it goes below 2, I am bullish and above 20 bearish. Which more in tradable term means, at around 2 a counter trend rally is in works and around 20 plus, a correction in bullish move is around.

F. said...

No, I actually faded Pradeep and had a big day yesterday :)

Really did anticipate the short covering though. Not only just me. Brett Steenbarger had posted about the increasing strength for past few days before Wednesday.

F. said...
This comment has been removed by the author.
F. said...

I agree that Pradeep's bearisheness on Tuesday was in line with the majority. This blog is sometimes right and sometimes wrong. But it is better than most blogs because it tries to clearly explain thinking in forecasting and it is not just a blind summary of what the market is doing wrt a lagging indicator such as a 50-da. JMO.