Posted by 4 January 2005

FOMC Says “Excessive Risk Taking in Markets”

The release of the FOMC minutes just created another wave of selling (via Briefing.com):

14:07 The FOMC Warns on Inflation

Fed warns on inflation and expresses concern over carry-trade, spurred on by low rates. Dec 14 FOMC minutes on the new schedule (3-weeks following meeting as opposed to 6-weeks, allowing the market to get scent of Federal Reserves expectations ahead of the next meeting). The long-end fell off as worries of inflation weighed on the long –end. The curve moved steeper as flattening plays were quickly unwound. (Please see Bond Market Update for more.) The 10-yrs are currently -23/32nds yielding 4.295%.

14:02 FOMC saw potentially excessive risk taking in markets; some members said low rates added to risk-taking

14:01 FOMC minutes indicate members saw Job outlook improving, inflation well contained

At least they didn’t call it irrational exuberance. It’s getting kinda ugly out there. The Naz is down 80 points from yesterday’s open as I type this. :-o

RSS Feed Subscribe to get Free Updates.

Comments

  1. Posted by skilletlicker on January 4, 2005 at 3:17 pm

    Do you use one of the pay-for services of briefing.com?

  2. Posted by Michael on January 4, 2005 at 3:19 pm

    yep, the Platinum package

  3. Posted by Duru on January 4, 2005 at 6:41 pm

    The overall message here is mixed. I would encourage folks that are interested in this kind of stuff to pull out the actual transcripts and judge for themselves what the Fed is really thinking here. Let’s recall that everyone already “knows” the Fed is on a campaign to hike rates…so what new information is really here? Are people scared the Fed will accelerate their campaign? Were folks too complacent about this year’s inflation prospects? Hmmmm…..!

  4. Posted by Duru on January 5, 2005 at 12:23 am

    OK..I finally read the Fed minutes for myself. And yep – I am convinced that market’s panic has some validity! The Fed is at least trying to appear less market-friendly than usual. This indeed could be a significant turning point. Yikes! Stay tuned…

  5. Posted by Michael on January 5, 2005 at 8:40 am

    See, there was no need to even read it for yourself. You could have just relied on the “Wisdom of the Crowd” and went by the market’s reaction! ;-)

  6. Posted by Duru on January 5, 2005 at 9:18 am

    Yeah, yeah, yeah…!