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Gold/Mining/Energy : Big Dog's Boom Boom Room
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To: Salt'n'Peppa who wrote (92856)10/31/2007 3:28:21 PM
From: GaAs52   of 206181
 
Fed statement vs Fed Cut:

The major indices gave back all their pre-FOMC decision gains. Is this a knee-jerk reaction to sell-the-news or there was sth in the statement?

I think with the statement Fed took back the cut they just gave:

FOMC said that "with this policy action upside risks to inflation roughly balance the downside risks to growth". They are now clear cut that no more rate cuts (unless the economy tanks).

There was also an acknowledgment that recent increases in energy and commodity prices may put renewed upward pressure on inflation. More importantly, today's vote wasn't unanimous. Kansas City Fed President Hoenig dissented, preferring no change in the fed funds rate.

This FED has a history of talking hawkish and acting dovish. However this FOMC statement puts gives them a guard against any rate-cut inducement by the market.
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