INO.com: "US Credit Review...Fed debate weigh on mkt"
news.ino.com
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Selected highlights.
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>>>The speculation was sparked by two articles written by Steven Beckner of Market News, the first on Tuesday afternoon and the second on Wednesday morning.
"The market was gyrating on Beckner this morning," Feinman said.
Tuesday's article, which moved the market significantly in afternoon trading, cited Fed sources saying the FOMC "will be giving consideration" to a 25 basis point rate cut at the end of the month.
Treasuries plummeted on the news, apparently reading the comments as saying that the Fed would not cut rates by 50 basis points, as most in the market had been expecting.
Beckner then wrote this morning that saying the FOMC will consider a 25 basis point cut is not the same as predicting the FOMC has dismissed a 50 basis point cut.
Following the release of Wednesday's article--which eased worries in the Treasury market--Treasuries moved upward, particularly at the short end of the Treasury curve.
"I'm not reading a lot into all the intra-day swings because the market will get a better handle on things once (Fed Chairman Alan) Greenspan speaks" before the Senate Budget Committee Thursday morning, said Hornbarger.
"Right now the market is trying to set up for the Fed's meeting and Greenspan's comments and is re-evaluating itself.
More and more, people are coming to the opinion that the Fed may not move at all or may cut rates by 25 basis points rather than looking at 25 or 50."
Meanwhile, Feinman said: "The fixed income market has priced in a lot of Fed easing, 50 basis points next week plus 50 basis points by mid-April.
Now Treasuries have been slipping of late as stocks have done better and there is more of a sense of comfort about the economy."<<< |
