In its America’s Morning Comment note, Nomura has a really nice way of summing up Bernanke’s challenge today, as the Fed releases a new policy statement, economic forecast, commentary (at the press conference).
But in the tepid market open, there was no doubt that attention was firmly focused on the Fed today, where the conclusion of the two-day FOMC meeting offers market participants a new policy statement, summary of economic projections and a press conference from Chairman Bernanke to dissect and digest. While our US economists do not expect the FOMC to announce a change in its asset purchases this month, they believe all three will signal that the Fed “is moving closer to a decision to reduce the pace of purchases, while at the same time seeking to minimize the significance of the move so to calm recent market jitters.”
That’s it. Establish some kind of path to ease up on the QE, while also making that seem like not a big deal.
Good luck, Ben!
For a complete preview of what Bernanke needs to do today, see Sam Ro’s preview here.
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