The United States Federal Reserve (Fed) announced it will indefinitely continue with its Quantitative Easing program, pressing on with its $85 billion monthly bond purchases as a way of extending stimulus to a still fragile US economy.
Philippine stocks are most probably gearing for a rally today following the announcement of the U.S. Federal Reserve that it will not end its Quantitative Easing program.
Earlier today, U.S. Federal Reserve Chairman Ben Bernanke said that the Fed will continue with its bond-buying program because current market conditions “are still far from what all of us would like to see”.
The Federal Open Market Committee (FOMC) of the U.S. Federal Reserve announced yesterday, June 19, that if the U.S. economy continues to improve, it will start winding down its asset-buying program and may completely end it by mid-year of 2014.
The news sent stock markets in the United States down by more than 1 percent, with the Dow Jones industrial average (DJIA) closing 205.96 points lower, or 1.34%, at 15,112.27.
The Standard & Poor’s 500 Index (S&P 500), meanwhile, closed 1.39% lower at 1,628.92, while the Nasdaq Composite Index was down 1.12% at 3,443.20.
A coordinated response by the world’s leading central banks to the Eurozone crisis led U.S. stocks to score their biggest daily percentage gains yesterday (November 30), with three benchmark indices ending with at least a 4% gain.
The Dow Jones Industrial Average (DJIA) closed at 12,045.68, up 490.05 points or 4.24%. It was the Dow’s biggest one-day gain since March 23, 2009.
The S&P 500 also surged, ending the trading day up 51.77 points, or 4.33%, to 1,246.96. It was the S&P’s highest daily gain since August 11, 2011.
The tech-heavy Nasdaq Composite Index also soared yesterday closing at 2,620.34, up 104.83 points or 4.17%.
There is a theory in finance and economics called the “Big Bank Theory” which asserts that governments — through the Central Bank or the Federal Reserve (in the case of the US) — will not allow a “big bank” to collapse because the economic impact of such occurrence will surely be great.
That was exactly the rationale behind last week’s bailout of the American International Group (AIG) by the US Federal Reserve (Fed).
The US Federal Reserve (Fed) cut today its federal funds rate by a quarter of a percentage point, giving a boost to US stock markets. … Read More
In a surprise move, the US Federal Reserve cut today the federal funds rate by three-quarters of a percentage point, in an attempt to fan … Read More
On September 18, 2007, the US Federal Reserve (the “Fed”) cut its target Fed funds rate by 50 basis points (half-of-a-percentage point) to 4.75%, giving a boost to stocks markets worldwide.
The Fed also cut its discount rate by another 50 basis points, bringing it down to 5.25%.