Today the FOMC concludes their latest two-day meeting, one in which no matter their decision, someone will be angry at them. (Hey, no one ever said this job would be easy!)
If the FOMC does not continue to “Twist and Shout” better known as operation twist (buying of longer term treasuries to twist the yield curve down i.e. longer term rates low) rates may begin to rise, making anyone who believes a 1.55% 10 year rate is too high, angry.
If the FOMC pulls the so-called punch bowl and let’s operation twist expire shortly, as it is scheduled, many will say the economy will falter as they believe it is too weak to sustain itself.
Here is a humorous take on the situation from Merk Investments.
We think there is a small possibility of a continuation of operation twist, however if we had our way, and our most logical outcome is to pull the punch bowl. (We can always bring it back later if ABSOLUTELY necessary.)
Have a Great Day!
PS: After a failed family fishing trip yesterday (the fish were left very safe) I was able to spend a much greater time than usual reviewing the various media outlets last night. While we think there will be no extension and hope there will not be as well, we are in the 30% minority (70% opinion chance of continued printing estimated by most.) We have always been contrarians!