Jan 272015
 

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By G. Steven Bray

While rate markets still seem most concerned about Euro-drama, this week may bring their gaze back to our shores. The Federal Reserve meets this week and releases its policy announcement on Wed. While no one expects the Fed to deviate from its previously announced plans, analysts will scour the release for changes in wording. Will the Fed acknowledge quantitative easing euro-style? What will the Fed say about the falling price of oil and its effect on inflation? Are recent weaker economic reports an indication of the slack in the economy noted in recent Fed statements? We may get answers Wed. Until then, expect rates to stay contained. Assuming the release contains no bombshells, markets probably will return to trend, which has been gentle improvement in concert with European rates, which are at all-time lows.

We have one other US event this week that could cause a stir. Friday brings the 1st estimate of 4th quarter GDP. This is a backward-looking report, and markets generally are expecting robust growth, but if the report greatly deviates from expectations, rates could move around a bit.

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