The markets today morning are in a bit of a jittery mood after seeing a huge rally overnight. Traders and investors are closely watching the release of the FOMC minutes after the Federal Reserve completes its 2 day meet today. The markets have seen a huge rally over the last week bouncing back from the close to 9% drop seen in the beginning of October. Traders and investors expect the Federal Reserve to stick to its timeline for tapering the bond buying program which would come to an end this October.
The market would be closely watching at commentary with regards to the path the Federal Reserve would take with regards to the direction of short term interest rates. The market would be looking at the fine print for the words “considerable time”. Many believe that if the words “considerable time” remain in the Fed statement, it would mean that the Central bank would delay raising interest rates going forward. At the same time, traders believe that if the Fed defines a clear guideline with regards to the timeline it sets for hiking short term interest rates.
Many believe the Federal Reserve Chairwoman Janet Yellen would be quiet glad with the underlying strength of the US labour markets which have shown tremendous growth since the beginning of the year. The only cause of concern for the Federal reserve, according to economist is the fact that both Europe and China are showing signs of stagnation which could effect the overall growth of the US economy. More than half of the economists polled expect Quantitative Easing to end by this October and the first interest rate hike to come in only by second quarter of 2015. The markets remain nervy with most major indices trading the red as we head into the release of the FOMC minutes.