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2006-08-09 :: The Fed Pauses – Or Does It?

When is a pause not a pause?  That’s what the investment markets were trying to figure out yesterday as the broader markets headed down in spite of the Fed not raising rates.

The big disaster was Chairman Bernanke’s statement, which was clear as mud.  Here is a paraphrase of it from Cody Willard that summed it up pretty good:  “We’re not raising rates today, but inflation has been creeping up and might continue to creep, but we think it won’t creep too much so we might not raise rates — but we still might.”

Based upon this lack of definitive direction, the markets will likely continue in turmoil for the forseeable future.

The Asian markets (Hong Kong and Japan) advanced over night on the potential turn in liquidity from a US end to interest rate hikes, so US markets may follow suit today.

Its frustrating playing the waiting game, but its all part of investing in equitites.

More later!

Mark