I am in the wordsmithing game, and the language that caught my professional attention was this:
"The Committee also will maintain its existing policy of reinvesting principal payments from its securities holdings. The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate."
Adjust, eh?
Adjust what? Well, the size and composition of the fed's securities holdings.
Could they have been more explicit in their intentions to reduce the holdings if that was their intention? Of course, in which case the statement would have said the following:
" The Committee also will maintain its existing policy of reinvesting principal payments from its securities holdings. The Committee will regularly review the size and composition of its securities holdings and is prepared to reduce those holdings as appropriate."
By the same token, they could have also said that it "...is prepared to increase those holdings as appropriate" if that is what they meant.
That they used 'adjust' to me means that both reductions and increases are in their armamentarium, ergo, QE is still a possibility.
As someone said, perhaps it was you, they are afraid of R. Paul, who is now in a very powerful position, so they used hyper-weasel language in their announcement.
I really don't think it amounts to diddly-squat, myself. If things get even worse, they will use Jackson Hole as a springboard for action. They just want to see how this downdraft develops.
Does anyone really think that interest rates were going down in this slow growth environment?
In the meantime, the 10 year yields 2.26%, and gold has to love it. |
