PrefBlog

The Fed is trying to get the show back on the road:

Federal Reserve officials stepped up their campaign to stem an increase in long-term borrowing costs that threatens to blunt the U.S. expansion and sought to clarify comments by Chairman Ben S. Bernanke that sparked turmoil in global financial markets.

William C. Dudley, president of the Federal Reserve Bank of New York, said any decision to reduce the pace of asset purchases wouldn’t represent a withdrawal of stimulus, and that an increase in the Fed’s benchmark interest rate is “very likely to be a long way off.” He said bond purchases could be prolonged if economic performance fails to meet the Fed’s forecasts.
…
[Atlanta Fed President Dennis] Lockhart, using a smoking metaphor, said the investors had misinterpreted the Chairman’s remarks. “It seems to me the Chairman said we’ll use the patch, and use it flexibly, and some in the markets reacted as if he said ‘cold turkey,” Lockhart said in a speech to the Kiwanis Club of Marietta in Georgia.

[Fed Governor Jerome ] Powell said and decision to reduce purchases would depend on economic data, and that there’s no set timetable.

“I want to emphasize the importance of data over date,” Powell said at the Bipartisan Policy Center in Washington. “In all likelihood, the current” large-scale asset purchases “will continue for some time.”

There was continued recovery for the Canadian preferred share market today, with PerpetualPremiums up 30bp, FixedResets gaining 19bp and DeemedRetractibles winning 46bp. There was, naturally enough, another bumper harvest of Performance Highlights. Volume was average.

This entry was posted on Friday, June 28th, 2013 at 12:29 am and is filed under Market Action. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.