Fed Officials Continue to Clarify Tapering Comments

Federal Reserve officials are still in damage control mode , after comments about winding down stimulus frazzled markets last week.
Jeremy Stein, a Federal Reserve Board Governor, noted Friday that investors may have overreacted after Fed Chairman Ben Bernanke said the central bank may start slowing its stimulus program later this year.

Initially, stocks fell and bond yields rose following Bernanke’s press conference last Wednesday. Since then, the 30-year mortgage rate spiked from 3.9% to nearly 4.5% — its biggest one-week gain in 26 years.

But Stein urged the public not to read too much into the volatility.
Consumers and businesses “should take care not to over-interpret these movements,” he said in prepared remarks. “We have attempted in recent weeks to provide more clarity about the nature of our policy reaction function, but I view the fundamentals of our underlying policy stance as broadly unchanged.”

via CNN

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza